• The ongoing USD pullback/upbeat UK retail sales helped to build on the overnight rebound.
• The intraday positive move gathered traction after PM May finally announced to step down.
• Renewed concerns about a no-deal Brexit might keep a lid on any strong follow-through move.
The GBP/USD pair struggled to sustain its intraday strength above the 1.2700 handle and quickly retreated around 30-35 from daily tops.
The pair built on the overnight goodish bounce from the 1.2600 neighborhood, or fresh multi-month lows, and the initial uptick was supported by a subdued US Dollar price action, weighed down by Thursday economic data that showed that the US manufacturing activity slowed to its weakest pace in five year.
Dismal US macro data revived speculation that the Fed will have to cut interest rates to support the economy and continued weighing on the greenback on the last trading day of the week. Meanwhile, the British Pound got an additional boost following the release of mostly upbeat UK retail sales data for April.
Apart from the macro data, the Sterling was further influenced by the latest UK political development, wherein the PM Theresa May announced that she will be stepping down as Party leader on June 7th. It is worth reporting that May had been under immense pressure amid disagreements on her revised Withdrawal Agreement Bill.
However, the fact that a pro-Brexit hardliner Boris Johnson is the leading candidate and is gathering momentum to replace May, renewed concerns about a no-deal spilt might now turn out to be one of the key factors keeping a lid on any runaway rally. Hence, it would be prudent to wait for a strong follow-through buying before confirming that the pair might have actually bottomed out in the near-term.
Moving ahead, Friday’s US economic docket – highlighting the release of consumer durable goods orders, might influence the USD price dynamics and produce some short-term trading opportunities, though is likely to act as a major game changer for the major.
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 trades weak below 1.0800 amid Good Friday lull, ahead of US PCE
EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair keenly awaits the US PCE inflation data and Fed Chair Powell's speech for fresh hints on next week's price action.
GBP/USD holds steady above 1.2600 as markets stay calm on Good Friday
GBP/USD trades sideways above 1.2600 amid a typical Good Friday trading lull. A broadly firmer US Dollar could keep any upside attempts limited in the pair ahead of the US PCE inflation data and Fed Chair Powell's appearance.
Gold reaches to all-time highs near $2,230, US PCE eyed
Gold price appreciates to all-time highs near $2,230 per troy ounce, attempting to continue its winning streak for the fifth successive session on Friday. However, trading volumes are light as market participants are likely observing Good Friday.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.
Key events in developed markets next week
Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.