- The intraday uptick runs out of the steam on softer UK retail sales data.
- UK political uncertainty further collaborated towards capping the upside.
- A subdued USD demand also did little to provide any meaningful impetus.
The GBP/USD pair failed to capitalize on its attempted intraday positive move and has now retreated to the lower end of its daily trading range, back below mid-1.2800s.
The pair continued showing some resilience below 100-hour SMA and gained some traction on Thursday, albeit the uptick quickly ran out of the steam in reaction to an unexpected drop in the UK monthly retail sales in October.
Traders remained on the sidelines
In fact, sales fall 0.1% during the reported month and raised some fears that consumer spending might not continue to support economic growth in the last quarter of the year, which might lead to policy easing by the BoE.
Against the backdrop of UK political uncertainty, the softer UK economic data exerted some pressure and turned out to be one of the key factors behind the pair's intraday pullback of around 20-25 pips from daily tops.
In the latest UK political development, the Brexit party leader Nigel Farage said this Thursday that they will fight the Labour party in all of its seats and further raised odds of a majority for the ruling Conservative party.
Meanwhile, a subdued US Dollar demand, possibly on the back of a sharp fall in the US Treasury bond yields, did little to influence, with the GBP price dynamics turning out to be an exclusive driver of the pair's momentum.
Despite the two-way moves, the pair remained confined well within a narrow trading band held over the past three trading sessions, warranting some caution before positioning aggressively for the next leg of a directional move.
Moving ahead, market participants now look forward to the Fed Chair Jerome Powell's second day of testimony and scheduled speeches by influential FOMC member in order to grab some short-term trading opportunities.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD fluctuates near 1.0700 after US data
EUR/USD stays in a consolidation phase at around 1.0700 in the American session on Wednesday. The data from the US showed a strong increase in Durable Goods Orders, supporting the USD and making it difficult for the pair to gain traction.
USD/JPY refreshes 34-year high, attacks 155.00 as intervention risks loom
USD/JPY is renewing a multi-decade high, closing in on 155.00. Traders turn cautious on heightened risks of Japan's FX intervention. Broad US Dollar rebound aids the upside in the major. US Durable Goods data are next on tap.
Gold keeps consolidating ahead of US first-tier figures
Gold finds it difficult to stage a rebound midweek following Monday's sharp decline but manages to hold above $2,300. The benchmark 10-year US Treasury bond yield stays in the green above 4.6% after US data, not allowing the pair to turn north.
Worldcoin looks set for comeback despite Nvidia’s 22% crash Premium
Worldcoin price is in a better position than last week's and shows signs of a potential comeback. This development occurs amid the sharp decline in the valuation of the popular GPU manufacturer Nvidia.
Three fundamentals for the week: US GDP, BoJ and the Fed's favorite inflation gauge stand out Premium
While it is hard to predict when geopolitical news erupts, the level of tension is lower – allowing for key data to have its say. This week's US figures are set to shape the Federal Reserve's decision next week – and the Bank of Japan may struggle to halt the Yen's deterioration.