GBP/USD heading back to 1.2400 handle after upbeat US data

The GBP/USD pair maintained its offered tone and is now heading back towards the lower end of daily trading range following the release of US economic data.

Currently trading around 1.2400 region, the pair came under renewed selling pressure after US monthly retail sales recorded a better-than-expected growth of 0.8% for the month of October. Meanwhile, core retail (excluding automobiles) also posted a strong growth of 0.8% as compared to September's 0.7% and 0.5% growth expected. 

Adding to this, a surprisingly positive Empire State Manufacturing Index (for the first time in four month) supported bullish sentiment surrounding the greenback led by expectations of an eventual Fed rate-hike action. The Empire State Manufacturing Index for current month moved back into expansion territory and came-in at 1.5 as against expected -2.5 and -6.8 recorded in the previous month.

Tuesday's upbeat US economic data provided little respite for the pair, which remained undermined by today's disappointing release of UK consumer inflation, as measured by CPI, for the month of October.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, notes, "in the 4 hours chart, the price has broken below its 200 EMA, whilst technical indicators have gained bearish momentum within negative territory, supporting a slide down the 1.2330 price zone, on a break below 1.2390. The immediate resistance is now 1.2440, and a recovery above the level will favor an advance up to the 1.2490 region."