GBP/USD snaps two-day win streak, UK Retail Sales in the pipe

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• GBP/USD pivoted around 1.2200 on Tuesday as Pound bids waffle.

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• UK data continues to miss the mark, UK Retail Sales figures up next.

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• Forex markets get a rare breather from US-centric economic data.

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GBP/USD churned chart paper near familiar levels on Wednesday, chalking in a flat day after exploring some intraday downside and snapping a two-day win streak as price action gets hung up on the 1.2200 handle.

UK Gross Domestic Product (GDP) growth rebounded in November but missed median market forecasts, registering a slim 0.1% MoM, down from the expected 0.2%, and climbing only moderately from the previous -0.1% contraction. UK Industrial Production barely moved the needle in November, contracting by 0.4% and entirely missing the forecast upswing to 0.1% compared to the previous month’s -0.6% backslide.

On the US side, Retail Sales figures moderated in December, easing back to 0.4% MoM in the headline figure. Markets expected a dip to 0.6% from the previous month’s revised 0.8%. Core Retail Sales, excluding automotive expenditures, rose to 0.4% MoM from 0.2%, meeting median analyst forecasts. The mixed figures failed to spark significant changes in investor sentiment in either direction.

UK Retail Sales figures for December are due early during Friday’s London market session and are expected to rebound to 0.4% from November’s 0.2% figure. On an annualized basis, Retail Sales are forecast to rally to 4.2% from the previous 0.5%, a lofty median target to set for an economic zone that has routinely missed market expectations in recent months.

GBP/USD price forecast

GBP/USD is struggling to stage a meaningful technical recovery after dumping into a fresh 15-month low late last week. Cable bids bounced off the 1.2100 handle, and price action is getting hung up on the 1.2200 technical level.

Despite some back-and-forth on the weekly candles, Cable is headed for a fourth straight monthly close in the red, and the trend is certainly looking particularly unfriendly to Pound bulls. However, technical oscillators are pinned deep into bear country, and price action traders might be looking to catch a rising knife as broader market momentum pivots.

GBP/USD daily chart