- GBP/USD lacked any firm directional bias and oscillated in a narrow range on Friday.
- Escalating US-China tensions benefitted the safe-haven USD and capped the upside.
- Slightly weaker-than-expected UK retail sales did little to provide any fresh impetus.
The GBP/USD pair extended its sideways consolidative price action and remained confined in a narrow trading band post-UK macro data.
The pair continued showing some resilience below the 1.2200 mark, albeit struggled to gain any meaningful traction amid reviving safe-haven demand for the US dollar. Worsening US-China relations and fears about the second wave of coronavirus infections overshadowed the recent optimism over the re-opening of economies globally.
Meanwhile, the incoming disappointing macro data, the UK retail sales figures being the latest, has been illustrating the extent of the economic damage caused by coronavirus-induced lockdowns. This, in turn, weighed on investors’ sentiment and benefitted the greenback’s relative safe-haven status against its British counterpart.
According to data released this Friday, the UK monthly retail sales plunged 18.1% MoM in April as compared to a 16% fall expected and 5.1% decline recorded in the previous month. The core retail sales, excluding auto motor fuel sales, also came in slightly weaker-than-anticipated and dropped 15.2% during the reported month.
The data, however, did little to provide any meaningful impetus as investors now seemed to await a fresh catalyst before positioning for the next leg of a directional move. In the meantime, the broader market risk sentiment might continue to influence the USD price dynamics and produce some short-term trading opportunities.
Technical levels to watch
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