GBP/USD supported at 1.2900, UK CPI in focus

The GBP/USD pair stalled its post-US retail sales slide at 1.2900 levels, and attempted a minor-recovery beyond the last, before meeting fresh supply at 1.2940 earlier on the day.

GBP/USD hovers near four-week troughs

Currently, GBP/USD trades +0.09% higher at 1.2925, receding gains from daily highs reached at 1.2940 in early Asia. After a volatile session experienced last Friday, the cable takes a breather and attempts a tepid-bounce on 1.29 handle, as investors consolidate the steep losses incurred on FOMC member Bullard’s comments, and thus, faded poor retail sales backed spike to 1.3034.

Further, the sell-off in the pound last Friday was also viewed as a repositioning attempt by the markets as we head into the UK CPI and jobs report due later this week. The upcoming macro updates from the UK holds more significance as they are expected to take into account the post-Brexit fallout on the British economy.

Meanwhile, a raft of crucial US economic releases due in the week ahead, including the CPI, industrial production etc., will be also closely eyed for further momentum on the pair.

GBP/USD Levels to consider                           

The pair has an immediate resistance at 1.2944 (5-DMA), above which 1.3000/02 (psychological levels/ 10-DMA) would be tested. On the flip side, support is seen at 1.2900 (4-week lows) below that at 1.2876/72 (Jul 7 & 8 low).