The GBP/USD pair struggled to gain further traction and reversed all of its better-than-expected UK data-led tepid gains to session peak level of 1.2620.
Currently trading with mild negative bias, around 1.2575 region, renewed US Dollar strength has been the key factor contributing to the pair's reversal from session peak touched in wake of higher-than-expected shrinkage in UK goods trade balance for the month of October. The pair's momentum, however, lacked conviction as investors seemed reluctant to initiate fresh positions ahead of the weekend. Nevertheless, the pair is now headed to for its first weekly decline in the previous three.
Next on tap would be US economic docket featuring the preliminary release of UoM Consumer Sentiment index and is expected to rise to 94.5 for December as compared to November's 93.8. The broader trend, however, would remain dependent on next week's Federal Reserve monetary policy meeting, which would provide fresh insights over the central bank's monetary policy outlook for 2017 and eventually provide fresh impetus for the pair's next leg of directional move.
Technical outlook
Valeria Bednarik, Chief Analyst at FXStreet, notes, "Short term and according to the 1 hour chart, the bearish potential has increased although a break below the mentioned support is required to confirm the slide, as the price is struggling around a still bullish 20 SMA, while the Momentum indicator remains flat above its 100 level and the RSI resumed its slide, now around 46. In the 4 hours chart, the 20 SMA heads strongly lower above the current level, whilst technical indicators are losing their upward strength within bearish territory, supporting the shorter term outlook."
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