- GBP/USD gained positive traction for the fourth consecutive session on Thursday.
- A modest USD rebound from multi-week lows capped the upside for the major.
- Mostly upbeat US economic releases did little to provide any meaningful impetus.
The GBP/USD pair held on to its intraday gains, albeit lacked any follow-through buying and remained capped below the 1.3800 mark post-US macro releases.
The pair built on this week’s goodish rebound from the 100-day SMA support, around the 1.3670-65 region and gained some positive traction for the fourth consecutive session on Thursday. However, a modest US dollar rebound from four-week lows kept a lid on any further gains for the GBP/USD pair.
The intraday USD uptick lacked any obvious fundamental catalyst and remained capped amid the ongoing decline in the US Treasury bond yields. Even the incoming positive economic data failed to impress the USD bulls as investors seem convinced that the Fed will keep interest rates low for a longer period.
Data published this Thursday showed that Retail Sales surged by 9.8% in March as against 5.9% growth anticipated. Adding to this, sales excluding autos, the closely watched Retail Sales Control Group, regional manufacturing indices and Jobless Claims all surpassed consensus estimates.
Meanwhile, the muted market reaction clearly indicates that investors have started looking through the headline-grabbing numbers as transitory. This, in turn, suggests that the path of least resistance for the greenback remains downside, supporting prospects for some appreciating move for the GBP/USD pair.
That said, the upside seems limited amid concerns that a link between the AstraZeneca COVID-19 vaccine and a rare blood clot could delay the UK government’s plan to reopen the economy. This makes it prudent to wait for some strong follow-through buying before placing fresh bullish bets.
Technical levels to watch
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