GBP/USD remains confined in a range, moves little post-UK data dump

The GBP/USD pair extended its sideways consolidative move around the 1.3870-65 region and had a rather muted reaction to the UK macro data dump.

The pair was seen oscillating in a range through the first half of the trading action on Thursday and so far, has failed to capitalize on the overnight solid bounce from the 1.3800 mark. That said, a subdued US dollar price action continued lending some support to the GBP/USD pair.

The US CPI report released on Wednesday showed signs of moderation in inflationary pressure and eased fears about an early withdrawal of the stimulus by the Fed. This was evident from a follow-through pullback in the US Treasury bond yields, which acted as a headwind for the greenback.

The GBP/USD pair, however, struggled to gain any meaningful traction and move little following the release of better-than-expected UK monthly GDP print. In fact, the economy expanded by 1% MoM in June against 0.8% anticipated and the quarterly growth rate stood at 4.8%, as expected.

This was accompanied by stronger Manufacturing and Industrial Production data for June. The positive readings were offset by an unexpected jump in the UK trade deficit, to £11.988 billion from £9.601 billion. This was seen as the only factor that capped gains for the GBP/USD pair.

Market participants now look forward to the US economic docket, featuring the release of the Producer Price Index (PPI) and the usual Initial Weekly Jobless Claims. This, along with the US bond yields, might influence the USD and provide some trading impetus to the GBP/USD pair.

Technical levels to watch