GBP/USD struggles near 1-month lows, but holds above 1.2800 handle
FXStreet News

GBP/USD struggles near 1-month lows, but holds above 1.2800 handle

   “¢   Disappointing US macro data prompts some USD weakness and helped ease bearish pressure.
   “¢   Traders still seemed reluctant to place aggressive bets ahead of Brexit debate in UK Parliament.

The GBP/USD pair failed to capitalize on the dismal US macro data-led bounce and remained within striking distance of one-month lows set earlier today.

The US Dollar took a sharp knock and tumbled across the board in reaction to a big disappointment from the US monthly retail sales figures for December (delayed due to the government shutdown).  

In fact, headline retail sales declined 1.2% m/m – the biggest drop since 2009, and the closely watched Retail Sales Control Group recorded its biggest monthly drop ever, falling 1.7% on a monthly basis.  

This coupled with an unexpected jump in the initial weekly jobless claims and mixed PPI report exerted some additional pressure on the buck, and turned out to be a key factor behind the pair’s goodish bounce in the last hour.

The uptick, however, lacked any strong conviction amid persistent Brexit uncertainty, especially after the news that the pro-Brexit ERG has decided to abstain in today’s votes in Parliament and set the stage for a government defeat.  

Technical outlook

Mario Blascak, FXStreet’s own European Chief Analyst writes: “The technical oscillators like the Relative Strength Index (RSI) and Momentum are flat in the neutral territory while Slow Stochastics fell into the Oversold territory. The GBP/USD is sitting at the 1.2820 level representing a 50-DMA on a daily chart with a break below that level targeting 1.2800-1.2750 thereafter. The 1.2883 representing a 100-DMA is resistance on the upside.”

FX Street

FX Street

FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions.