- GBP / USD struggled to capitalize on its positive intraday move amid COVID-19 nerves.
- A dovish USD price action extended some support and helped limit the downside.
- Raising US bond yields, upbeat US retail sales data failed to impress USD bulls.
The pair GBP/USD held steady near the 1.3815-20 region and had a rather subdued reaction to upbeat US monthly retail sales figures.
Having shown some resistance below the 1.3800 mark, the GBP / USD pair gained some positive traction during the first half of the European session, although it struggled to capitalize on the move. The worsening COVID-19 situation in the UK acted as a headwind for the British pound and limited the pair’s gains.
The rally lost steam rather quickly and was met with some new supply near the 1.3860 region. That said, a dovish action in the price of the US dollar extended some support to the GBP / USD pair. USD bulls ignored the strong rally in US Treasury yields and did not seem impressed by stronger US macro data.
The US Census Bureau reported that the total value of retail sales increased 0.6% in June, beating consensus estimates that point to a 0.4% decline. Excluding autos, underlying retail sales also broke expectations and rose 1.3% month-on-month during the reported month, although they did little to boost the dollar.
A downward revision of the already weaker readings from the previous month appeared to be the only factor preventing the USD bulls from making bets. however, the data should reinforce market expectations that the Fed will adjust its policy sooner. This could help the USD attract purchases and put pressure on the GBP / USD pair.
Technical levels
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