- The prevalent USD selling bias helped build on the overnight rebound from 27-month lows.
- Barnier’s comments/upbeat UK retail sales data provided an additional boost to the GBP.
The GBP/USD pair built on the overnight recovery move from 27-month lows and continued gaining positive traction for the second consecutive session on Thursday.
The US Dollar remained depressed in wake of the ongoing slide in the US Treasury bond yields – led by rising odds for an aggressive policy easing by the Fed, and was seen prompting some follow-through short-covering move.
The British Pound got an additional boost in reaction to the European Union (EU) chief Brexit negotiator Michel Barnier’s comments, showing readiness to work on alternative arrangements for the Irish border.
The positive momentum back closer to the key 1.2500 psychological mark was further supported by Thursday’s upbeat UK macro data, showing an unexpected jump in monthly retail sales figures for June.
In fact, the headline UK retail sales recorded a strong growth of 1.0% during the reported month as compared to a drop of 0.3% expected and the previous month’s downwardly revised reading of 0.6%.
Adding to this, core retail sales – excluding fuel, and yearly growth rates also surpassed the most optimistic estimates and remained supportive of the strong bid tone surrounding the major.
It, however, remains to be seen if the pair is able to capitalize on the recovery move or meets with some fresh supply at higher levels amid the UK political and persistent fears of a no-deal Brexit on October 31.
Later during the early North-American session, the US economic docket – featuring the release of Philly Fed manufacturing index and the usual initial jobless claims, will now be looked upon for some fresh impetus.
Technical levels to watch
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