• A slump in the shared currency revived USD demand and exerted some pressure.
• Surprisingly stronger UK retail sales data underpin GBP and helped limit losses.
• Traders now eye US retail sales data for some impetus ahead of Easter holidays.
The GBP/USD pair quickly recovered around 20-pips and reversed a major part of its early slide to near two-week tops on upbeat UK macro data.
The pair failed to capitalize on its early uptick to mid-1.3000s and met with some fresh supply amid a modest US Dollar uptick. Today’s sluggish Euro-zone PMI prints reignited global growth worries and spread some fresh jitters across global financial markets, reviving the greenback’s relative safe-haven status.
The pair, however, managed to find some support at lower levels following the release of UK retail sales figures, coming in to show an unexpected 1.1% m/m in March. Adding to this, the yearly rate and core retail sales (excluding fuel) also surpassed expectations and provided a minor lift to the British Pound.
Meanwhile, the uptick lacked any strong bullish conviction as investors still seemed reluctant to place any aggressive bets amid the prolonged Brexit uncertainties, despite the lack of any fresh updates in wake of the Easter recess in the UK Parliament.
Hence, it would be prudent to wait for a strong follow-through buying, possibly a sustained move beyond the 1.3100 handle, before confirming that the pair might have actually bottomed out in the near-term and positioning for any further appreciating move.
Later during the early North-American session, the US monthly retail sales data might influence the USD price dynamics and further collaborate towards producing some meaningful trading opportunities amid relatively thin market conditions ahead of the long Easter weekend.
Technical levels to watch