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  • The prevalent USD selling bias helped regain some positive traction on Thursday.
  • The UK economy contracted by 0.1% in August as against a flat reading expected.
  • Manufacturing/industrial production figures also fell short of consensus estimates.

The GBP/USD pair maintained its bid tone through the early European session on Thursday, albeit eased a bit from session tops in reaction to mixed UK macro data.
Having shown some resilience below the 1.2200 round-figure mark for the third straight session, the pair managed to regain positive traction on Thursday and was being supported by the prevalent US Dollar selling bias.

Softer UK macro data does little to influence

The positive momentum, however, lacked any strong follow-through and met with some fresh supply after the UK monthly GDP report showed that the economy unexpectedly contracted by 0.1% in August.
Adding to this, the UK manufacturing and industrial production contracted more-than-expected in August, though was partly offset by slightly lower-than-expected trade deficit figures for the same month.
It will now be interesting to see if the pair is able to capitalize on the positive move or once again fizzles out at higher levels amid persistent uncertainties surrounding Britain’s exit from the European Union.

Technical levels to watch