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  • UK political uncertainty held investors from placing any aggressive bets.
  • A subdued USD demand helped limit the downside ahead of the US data.

The GBP/USD pair lacked any firm directional bias on Friday and oscillated in a narrow trading range, below the 1.2900 handle through the mid-European session.
The pair failed to capitalize on the previous session’s late pickup and remained capped below the top end of its weekly trading range as investors still seemed reluctant to place any aggressive bets amid uncertainty over the outcome of the UK snap election on December 12.

Traders remained on the sidelines

It is worth reporting that the incoming polls have indicated a majority for the ruling Conservative party. The odds increased further on reports that Brexit party leader Nigel Farage could back down on closely contested Labour-held seats to give Boris Johnson more of a winning chance in the election.
Bulls, however, seemed unimpressed, rather preferred to wait on the sideline and wait for a fresh catalyst before positioning for the next leg of a directional move. Meanwhile, the downside remained cushioned on the back of a subdued US Dollar demand.
Despite the incoming positive trade-related headlines, which raised hopes of a US-China trade deal, and a strong intraday pickup in the US Treasury bond yields, the greenback failed to gain any meaningful traction ahead of Friday’s release of the US monthly retail sales figures.
Apart from the key consumer spending data, some second-tier US economic releases – Empire State Manufacturing Index, Industrial Production and Capacity Utilization Rate – might further influence the USD price dynamics and contributed towards producing some short-term trading opportunities.

Technical levels to watch