GBP/USD: Will it take-out 1.3000 on UK retail sales rebound?

Dhwani Mehta FXStreet

The GBP/USD failed yet another attempt to surpass stiff resistance lined up just ahead of 1.2990 levels in the Asian session, as investors await the UK retail sales data to take the spot finally through 1.30 handle.

GBP/USD: 1.2900 or 1.3000 on the UK retail sales

The major paused its 4-day pullback and returned to the red zone, as bears continue to guard 1.30 barrier amid negative global equities, which spook the sentiment around the higher-yielding GBP.

Moreover, stalled USD selling across the board in the wake of a relief-rally in the US yields, also keeps a lid on the major. The USD index consolidates the downside near fresh six-month lows reached earlier today at 97.28.

However, the losses remain capped amid latest headlines on the UK PM May, as reported Telegraph, cited that Theresa May is likely to pledge that corporation tax will fall to 17% by 2020.

Also, expectations of a solid rebound in the UK retail sales volume due to be reported later today, continues to offer some support to the GBP bulls. Markets are expected the UK retail sales to reverse course and jump to 1.0% in April versus a sharp seen previously.

GBP/USD Levels to consider

A break above 1.2992 (7-month high) could lift the pair above 1.3050 (psychological levels), beyond which a test of 1.3400 (round figure) is imminent. Conversely, a break below 1.2926/21 (5 & 20-DMA), leading to a subsequent break below 1.2872 (May 15 low) is likely to drag the pair towards testing its next support near 1.2842/29 (May 12 & 4 low).

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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