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GBP/USD rejected near 1.3300 handle post-UK data

2018-7-10 16:58:53Market Analysis
GBP/USD rejected near 1.3300 handle post-UK data

The GBP/USD pair quickly reversed an early European session dip to an intraday low level of 1.3223, albeit struggled to build on its momentum beyond the 1.3300 handle post-UK data.


The pair managed to regain positive traction on Tuesday and recovered a major part of overnight losses triggered by news of Boris Johnson's resignation as Foreign Minister. The up-move, however, fizzled out near the 1.3300 handle following the release of weaker-than-expected UK macroeconomic releases.


In fact, the UK industrial production data showed an unexpected contraction of 0.4% in May and manufacturing output also fell short of consensus estimates. A combination of disappointing manufacturing data seems to have negated mostly in line UK monthly GDP figures, coming in to show m/m growth of 0.3% for May. 


Meanwhile, a modest pickup in the US Dollar demand further collaborated towards capping any strong follow-through gains, with the pair quickly retreating around 30-35 pips in reaction to the mixed UK economic data.


Technical levels to watch


Immediate support is pegged near the 1.3255-50 region, below which the pair is likely to head back towards challenging the 1.3200 handle. On the flip side, sustained move back above the 1.3300 handle could get extended but might continue to face stiff resistance near mid-1.3300s (50-day SMA).