GBP/USD - Off session highs but above 1.39, eyes UK retail sales data

• GBP/USD rally stalls above 1.39 levels.
• Focus on UK retail sales.  

GBP/USD has backed-off from the session high of 1.3925 but remains big above 1.39 levels.

The bullish momentum seems to have weakened on caution ahead of the UK data. The Office for National Statistics (ONS) data due at 09:30 GMT is expected to show consumption as represented by the retail sales dropped 0.6 percent month-on-month in December. Meanwhile, core retail sales (excluding fuel) are seen falling 0.8 percent.

A weaker-than-expected figure could weigh over British Pound. That said, the downside could be capped by fears of a US government shutdown.

GBP/USD Technical Outlook

Jim Langlands from FXCharts writes, "The momentum indicators generally look positive, but Cable remains volatile so caution is warranted. Buying dips seems to be the theme though, with an SL placed back below 1.3800. UK Retail Sales are due today (exp -0.6%mm, +3%yy).