GBP/USD bounces off two-week lows after UK retails sales

Having posted a session low at 1.2508, the GBP/USD pair managed to recover some of its lost ground to two-week low following the release of UK retail sales data.

Currently trading around 1.2530-35 region, the pair halted its bearish slide and defended 1.2500 psychological mark support after UK monthly retail sales recorded, in-line with forecasts, growth of 0.2% in November. Meanwhile, excluding autos and fuel, the sales grew at 0.5% vs 0.1% expected. Although the readings were in-line/better-than forecasts, the growth remained dismal as compared to last month's strong growth of 1.8% and 1.9% respectively.

The momentum, however, seems to have paused for the time being as investors now await for BoE monetary policy decision. BoE is not expected to alter the benchmark interest rates or its quantitative easing program and is also likely to hint towards maintaining a neutral stance in the near-future. 

Later during NA session, US economic docket that includes - CPI, Philly Fed Manufacturing Index and weekly jobless claims, would now be looked upon for fresh impetus.

Technical levels to watch

Any recovery attempts might continue to face resistance near 1.2565-70 region (session peak) above which the momentum could get extended beyond 1.2600 handle towards its next major resistance near 1.2670-75 zone. Meanwhile on the downside, 1.2500 psychological mark remains immediate strong support to defend, which if broken decisively might turn the pair vulnerable to head towards testing 50-day SMA support near 1.2415 region.