GBP/USD reverses sharply to test 1.2960, ignores upbeat UK data

Dhwani Mehta FXStreet

The GBP/USD pair failed to sustain the bounce above 1.30 handle, despite a Big beat seen in the UK retail sales data, knocking-off the rate sharply towards the mid-point of 1.29 handle.

GBP/USD eyes on EUR/GBP for fresh impetus

The GBP/USD pair retraced sharply from 1.3017 levels reached immediately after the UK retail sales data for June staged a solid rebound across the time horizon. UK retail sales rebound sharply in June, a Big beat on expectations

The spot witnessed good two-way trading so far this Thursday, with the bears now fighting back control amid renewed fears over the Brexit deal, after the UK Trade Minister Liam Fox said earlier that Britain can survive with no Brexit deal.

Moreover, Brexit jitters continue to haunt the GBP markets as the UK’s Brexit Minister Davis meets the EU Chief Brexit negotiator Barnier in Brussels later on Thursday, in order to wrap up the first substantive rounds of Brexit talks.

The reversal can be also attributed partly to notable US dollar demand across the board, as Treasury yields attempt a tepid bounce amid risk-on rally witnessed in the global equities. Next of note for the major remains the ECB monetary policy decision, which could have a cross-driven rub-off effect on the pound.

GBP/USD levels to consider

Valeria Bednarik, Chief Analyst at FXStreet noted, “The current price zone is a strong static support, which means the pair could consolidate around it before taking next step. A downward acceleration should result in a test of 1.2920 first, while further slides could see the pair reaching 1.2870. Above 1.3010, the risk turns back towards the upside, with scope then to retest 1.3060.”

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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