GBP/USD clings to gains near 1.2150, looks to snap four-week losing streak

After inching closer to the critical 1.20 handle and refreshing its lowest level since early January at the start of the week, the GBP/USD pair staged  |  16/08/2019 16:04
  • SNP is reportedly cooperating with Labout to block no-deal Brexit.
  • This week's data from UK ease concerns over economic slowdown.
  • GBP/USD remains on track to add more than 100 pips for the week.

After inching closer to the critical 1.20 handle and refreshing its lowest level since early January at the start of the week, the GBP/USD pair staged a decisive recovery on the back of this week's upbeat macroeconomic data releases from the UK and now looks to snap its four-week losing streak. As of writing, the pair was up 0.6% on the day at 1.2157 and was adding more than 100 pips for the week.

UK data steal the spotlight this week

The UK's Office for National Statistics earlier this week reported that the Claimant Count Change came in at 28,000 in July to better the market expectation of 32,000 and the annual wage inflation, as measured by the Average Earnings Including Bonuses, rose to 3.7% from 3.5%. Additionally, retail sales in July expanded by 0.2% to beat the market expectation for a decline of 0.2%.

Meanwhile, citing Labour party sources familiar with the matter, Joe Murphy, the political editor of the London Evening Standard, today reported that the Labour Party was moving closer to cooperation with the Scottish National Party (SNP) to block a no-deal Brexit to provide additional support to the British pound.

On the other hand, today's data from the US showed that the University of Michigan's Consumer Confidence Index slumped to 92.1 in August to reveal the negative impact of the US-China trade conflict on consumers and weighed on the Greenback. Nevertheless, the US Dollar Index continues to float above the 98 handle and remains on track to post a weekly gain of more-than-1%. However, the ongoing trade war with China and falling Treasury bond yields could cause investors to price a dovish Fed action and make it difficult for the currency to continue to find demand.

Technical levels to watch for

 

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