GBP/USD recovers from UK data-led slump, back to test 1.3000

The pound was hit by unimpressive UK data releases, and hence, dragged GBP/USD sharply lower to test the mid-point of 1.29 handle. However, fresh bids emerged near the last, now pushing the rate back to test 1.30 handle.

GBP/USD: Focus on UK dataflow

The spot witnessed good two-way business so far this Thursday, having slipped to 1.2950 levels amid broad based US dollar strength and mixed UK economic releases, while the latest leg higher in Cable can be mainly attributed to a solid recovery staged by oil prices, which offered the much-needed respite to the higher-yielding currency GBP, struggling amid persisting risk-off trades, fuelled by North Korea tensions.

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UK June trade data disappoints across all indicators

Looking ahead, it remains to be seen if the GBP/USD pair can take on the recovery well beyond 1.30 handle, as expectations of higher core PPI data could provide extra legs to the USD’s vertical rise.

GBP/USD levels to consider             

Karen Jones, Analyst at Commerzbank noted: “GBP/USD remains under pressure following the key day reversal last week from the 50% retracement at 1.3255 and the break of its near term uptrend: With such a strong rejection from the Fibo resistance seen, we continue to suspect that 1.3267 was the end of the move. We look for losses to the support circa 1.2775/50 (December 2016 high) and the uptrend at 1.2699. Intraday rallies are likely to find initial resistance at 1.3035/55 ahead of the 1.3267 recent high.”