GBP/USD retreats from multi-month tops post-US data

Haresh Menghani FXStreet

The GBP/USD pair trimmed some of its upbeat UK retail sales data-led strong gains to multi-month tops and retreated to 1.3020 after the US economic data.

The pair dipped in reaction to the US data that showed weekly jobless claims unexpectedly dropped to 232K for the week ended May 12 from 236K reported last week. Adding to this, the Philly Fed Manufacturing Index jumped to 38.8 for May, as compared to previous month's reading of 22.

Today’s stronger-than-expected US economic data remained supportive of today’s goodish greenback recovery, with the key US Dollar Index holding on to is gains near mid-97.00s.

Meanwhile, the sentiment surrounding the British Pound remained positive in wake of today's stellar retail sales figures, which surpassed even the most optimistic estimates and posted a strong growth for the month of April and helped the pair to extend its up-rise since the beginning of this week.

Next in focus would be the US Treasury Secretary Steven Mnuchin's testimony on Rollback of Dodd-Frank Financial Regulations before the Senate Banking Committee, later during the day.

Technical levels to watch

Sustained momentum above 1.3050 level could get extended towards 1.3075-80 resistance, above which the pair seem all set to surpass the 1.3100 handle and head towards testing its next resistance near 1.3130 area.

Meanwhile, retracement back below the key 1.30 psychological mark could prompt additional profit taking and drag the pair towards 1.2940 strong horizontal support with previous strong hurdle near 1.2970 level acting as intermediate support.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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