GBP/USD struggling to defend 1.2800 handle, UK retail sales in focus

The GBP/USD pair eroded part of previous session's up-move and traded with bearish bias marginally below the 1.2800 handle.

Having peaked at 1.2900 level, the highest level since early October, in wake of the UK PM Theresa May's surprise announcement on Tuesday to call for a snap election, the pair seems to have moved into consolidative phase and has struggled to move back above mid-1.2800s. Even on Thursday, the pair trimmed early gains after the US Treasury Secretary Mnuchin's optimistic remarks to bring a major tax reform, no matter the delays so far. 

On the last trading day of the week, some long-unwinding trade seems to be only factor weighing on the major. The downslide, however, has been limited as investors now look forward to the release of monthly retail sales data from the UK, due later during European session. 

Meanwhile, with sentiment around the British Pound turning positive, any near-term corrective slide would now be looked upon as fresh buying opportunity on possibilities of a 'soft Brexit'.

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Apart from the UK macro data, investors will also scrutinize external BOE MPC Member Michael Saunders' speech for some remarks on monetary policy. Later during the day, the release of existing home sales data from the US alongside speech by Minneapolis Fed President Neel Kashkari might provide some fresh impetus during early NA session.

Technical levels to watch

Bears would be eyeing for a follow through weakness below 1.2775-70 immediate support, below which the downslide could get extended towards 1.2730 intermediate support ahead of the 1.2700 handle.

On the upside, momentum above 1.2830-35 zone could get extended towards 1.2850-60 resistance area, above which the pair is likely to aim back towards reclaiming the 1.2900 handle.