GBP/USD sticks to modest gains around 1.3800 mark post-UK Retail Sales
- GBP/USD gained some positive traction on Friday amid a modest USD pullback.
- Dismal UK Retail Sales figures did little to impress bulls or provide any impetus.
The GBP/USD pair held on to its modest intraday gains, albeit retreated few pips from daily tops in reaction to disappointing UK Retail Sales figures.
The pair attracted some dip-buying near the 1.3775-70 region on the last day of the week and moved away from the previous day's swing lows touched in the aftermath of upbeat US macro data. A modest US dollar pullback from three-week tops was seen as a key factor that provided a modest lift to the GBP/USD pair, though the uptick lacked follow-through.
The UK Office for National Statistics reported this Friday that the value of inflation-adjusted sales at the retail level unexpectedly fell 0.9% in August. Adding to this, core sales (excluding fuel) also declined more than anticipated, by 1.2% during the reported month, which acted as a headwind for the British pound and capped the upside for the GBP/USD pair.
On the other hand, firming expectations that the Fed would begin rolling back its pandemic-era stimulus sooner rather than later should continue to lend some support to the greenback. This, in turn, might further collaborate to keep a lid on any meaningful gains for the GBP/USD pair, warranting some caution for aggressive bullish traders.
Market participants now look forward to the release of the Prelim US Michigan US Consumer Sentiment Index, due later during the early North American session. This, along with the broader market risk sentiment and the US bond yields, might influence the USD price dynamics and produce some short-term trading opportunities around the GBP/USD pair.
Technical levels to watch