GBP/USD holds steady near 1.30 mark post US data

The GBP/USD pair extended its recovery move from unimpressive UK data-led fall to three-week lows and held near session tops following the US macro data.

The pair has witnessed good two-way action so far this Thursday and spiked back above the key 1.30 psychological mark after data released from the US showed weekly jobless claims unexpectedly rose to 244K during the week ended August 4, albeit continued reflecting the underlying strength in the US labor market.

Separately, headline and core PPI (excluding food, energy and trade) surprisingly dropped by 0.1% m-o-m in June, dragging the yearly rates to 1.9% and 1.8%, respectively. The softer PPI print clearly indicated easing inflationary pressure and failed to assist the US Dollar to build on early up-move. 

Meanwhile, market reaction to today’s data turned out to be relatively muted as investors preferred to stay on the sideline ahead of Friday’s CPI figures, which would be the next big fundamental trigger driving the USD in the near-term. 

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet writes: "The pair is poised to extend its decline, given that in the 4 hours chart, the price has extended further below a bearish 20 SMA, currently at 1.3010,  while technical  indicators faltered on an early approach to their mid-lines and resumed their declines. A break below 1.2950 should lead to an extension down to 1.2910, with additional slides targeting 1.2870.Above 1.3010 the bearish pressure will likely ease, but selling interest will likely resurge should the pair approach to the 1.3050/60 price zone."