GBP/USD jumps to 1.2700 neighborhood after disappointing US retail sales

Having posted a session low at 1.2635 level, the GBP/USD pair reversed its course and jumped to 1.2700 neighborhood following the release of US monthly retail sales data.

According to the data released just a short while ago, US monthly retail sales recorded a tepid growth of 0.1% in November as compared to 0.3% expected and 0.6% registered in October. Meanwhile, core retail sales (excluding automobiles) also fell short of expectations and came-in to show a growth of 0.2% versus consensus estimates pointing to a growth of 0.4%. Disappointing US macro data helped the pair to regain traction after failing to benefit from upbeat UK employment details, released earlier during European session. 

With US economic data out of the way, investors focus would remain glued to the much awaited Fed monetary policy decision, slated later during NY trading session and would be looked upon for fresh impetus ahead of BOE meeting on Thursday. 

Technical levels to watch

A follow through buying interest has the potential to continue lifting the pair further towards 100-day SMA resistance near 1.2760 region with 1.2730 level (yesterday’s high) providing some intermediate resistance.

On the downside, weakness back below 1.2670 level, leading to a subsequent drop below session low support, is likely to accelerate the slide towards 1.2600 round figure mark, en-route 1.2575-70 strong horizontal support.