GBP/USD ticks higher despite weaker UK retail sales data, BoE in focus
- The lack of progress to solve the Irish backstop issue bulls on the defensive.
- Weaker UK monthly retail sales data failed to provide any meaningful impetus.
- Thursday’s key focus will remain firmly on the latest BoE monetary policy decision.
The GBP/USD pair ticked higher and refreshed session tops post-UK retail sales figures, though remained capped below the key 1.2500 psychological mark.
Data released on Thursday showed that the UK retail sales unexpectedly declined by 0.2% in August, and the yearly rate decelerated sharply to 2.7% as compared to the previous month's upbeat reading of 3.3%. Adding to this, core retail sales - excluding fuel – also fell short of market expectations and came in at -0.3% and 2.2% on a monthly and yearly basis, respectively.
UK retail sales did little to influence ahead of BoE
Despite the weaker reading, the pair ticked higher and was being supported by a modest US Dollar pullback. Further gains, however, are likely to remain capped on the back of the lack of progress to solve the Irish backstop issue. Moreover, investors might also be reluctant to place any aggressive bets ahead of the latest BoE monetary policy decision, due later this Thursday.
Hence, it will be prudent to wait for a sustained break in either direction before traders start positioning for any meaningful intraday momentum. Later during the early North-American session, the US economic docket - featuring the release of initial weekly jobless claims and Philly Fed Manufacturing Index - might further contribute towards producing some short-term trading opportunities.
Technical levels to watch