GBP/USD Struggles for gains despite risk-on pulse

The GBP/USD is trading flat but but erratic as it attempts to stay above the 1.2400 handle. The midweek rally in the Pound Sterling remains vulnerable as markets pare back gains. The GBP is consolidating due to weak UK data.

As the pair struggles to break above the upper end of recent consolidation, the GBP/USD pair is merely hovering above the 1.2400 handle. Against the US Dollar, the pound sterling is finding it difficult to maintain its gains this week.

In the middle of the week, the GBP gained 2.25% against the US dollar, but it has since eased back to a more respectable 1.65%.

The markets’ renewed speculation that the Fed is done raising interest rates is driving a broad-market risk-on pulse, but the UK data is missing the mark, keeping the GBP/USD stuck in the middle.

October saw a 0.3% MoM decline in UK retail sales. Monthly UK Retail Sales decreased; October’s figure came in at -0.3%, bucking the market’s 0.3% increase forecast.

Investor attention was focused on losses towards the end of the market, with September’s figure revised even lower from -0.9% to an alarming -1.1%.

The UK’s annualised retail sales performed even worse, exceeding the forecasted -1.5% and ending the year at -2.7% as opposed to the prior -1%.

Investors will be focused on the Fed’s most recent meeting minutes, which are released on Tuesday of next week.

Technically speaking, the pair has been positive for the week, up 1.65%, as the pound sterling holds onto the gains from the middle of the week.

Hourly candles are battling the 50-hour Simple Moving Average (SMA) and a near-term rising trendline from last week’s lows near 1.2200 is keeping intraday action on the top side. However, a flattening 200-hour SMA is expected to keep pulling bids back into the median range.

As the pair struggles to generate new long-term momentum, daily candlesticks show the GBP/USD strung up on the 200-day SMA. This week’s peak at the 1.2500 handle represents the crucial number that bulls need to beat.