- GBP / USD witnessed further selling on Thursday amid resurgent demand for the USD.
- The USD held high following the release of mostly upbeat US economic data.
- A sustained break below 1.3800 will set the stage for further losses.
The GBP/USD it maintained its offered tone during the early days of the American session and was last seen hovering around the daily lows, just below 1.3800 after the macro data from the US. The pair has touched daily lows at 1.3792, a level already tested on Wednesday. .
The pair struggled to capitalize on the good rally the day before from weekly lows and was met with fresh offers on Thursday amid resurgent demand for the US dollar. Despite signs of easing inflationary pressure in the US, expectations of an imminent announcement of the Fed’s phase-down later this year continued to act as a tailwind for the dollar.
Aside from this, a modest rally in US Treasury yields, coupled with concerns about the rapidly expanding delta variant and a global economic slowdown, further supported the safe-haven dollar. On the economic data front, US retail sales and the Philadelphia Fed manufacturing index beat expectations and continued to support the tone offered around the dollar.
In fact, core sales unexpectedly grew 0.7% in August, while excluding auto sales rose 1.8% during the reported month. Separately, the Philadelphia Fed manufacturing index jumped to 30.7 for the current month from 19.4 reported in August. This, to a greater extent, helped offset a slight disappointment in US Initial Unemployment Claims.
Meanwhile, the GBP / USD pair has, so far, managed to defend the 1.3800 round mark. This coincides with the 200-period SMA on the 4-hour chart and should now act as a key fundamental point. Some follow-up selling, leading to a subsequent break below short-term rising channel support, should pave the way for a further depreciation move.