- The intraday uptick runs out of the steam on softer UK retail sales data.
- UK political uncertainty further collaborated towards capping the upside.
- A subdued USD demand also did little to provide any meaningful impetus.
The GBP/USD pair failed to capitalize on its attempted intraday positive move and has now retreated to the lower end of its daily trading range, back below mid-1.2800s.
The pair continued showing some resilience below 100-hour SMA and gained some traction on Thursday, albeit the uptick quickly ran out of the steam in reaction to an unexpected drop in the UK monthly retail sales in October.
Traders remained on the sidelines
In fact, sales fall 0.1% during the reported month and raised some fears that consumer spending might not continue to support economic growth in the last quarter of the year, which might lead to policy easing by the BoE.
Against the backdrop of UK political uncertainty, the softer UK economic data exerted some pressure and turned out to be one of the key factors behind the pair’s intraday pullback of around 20-25 pips from daily tops.
In the latest UK political development, the Brexit party leader Nigel Farage said this Thursday that they will fight the Labour party in all of its seats and further raised odds of a majority for the ruling Conservative party.
Meanwhile, a subdued US Dollar demand, possibly on the back of a sharp fall in the US Treasury bond yields, did little to influence, with the GBP price dynamics turning out to be an exclusive driver of the pair’s momentum.
Despite the two-way moves, the pair remained confined well within a narrow trading band held over the past three trading sessions, warranting some caution before positioning aggressively for the next leg of a directional move.
Moving ahead, market participants now look forward to the Fed Chair Jerome Powell’s second day of testimony and scheduled speeches by influential FOMC member in order to grab some short-term trading opportunities.
Technical levels to watch
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