“¢ Already weaker USD dips further after mixed US economic releases.
“¢ The uptick remains capped below UK retail sales data-led swing high.
The GBP/USD pair continued with its lacklustre trading action through the early North-American session and had a rather muted reaction to the mixed US economic releases.
Having failed to gain any meaningful traction from today’s upbeat UK monthly retail sales data, the pair ticked higher by around 10-15 pips in reaction to the US data that showed a larger than expected decline in the Philly Fed Manufacturing Index, coming in at 11.9 for August as compared to 25.7 previous.
This coupled with weaker than expected housing starts data exerted some additional downward pressure on the already weaker US Dollar and provided a minor lift to the major. The negative readings, to some extent, were offset by mostly in-line US building permits data and an unexpected decline in the initial weekly jobless claims.
It would now be interesting to see if the pair is able to build on the positive move or continues facing difficulty in breaking through the 1.2730-35 supply zone, the neck-line resistance of a bullish inverted head & shoulders chart pattern formation on the 1-hourly chart.
Technical levels to watch
Momentum beyond the mentioned barrier is likely to accelerate the up-move towards 1.2765-70 supply zone before the pair eventually aims towards reclaiming the 1.2800 handle. On the flip side, the 1.2690-85 region now seems to have emerged as an immediate strong support, which if broken might turn the pair vulnerable to resume with its near-term bearish trajectory.
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