GBP/USD keeps low near mid-1.2900s after mixed US data

The greenback held on to its recovery gains, with the GBP/USD pair heading back towards the lower end of daily trading range following US economic releases.

Currently trading around mid-1.2900s, the pair maintained its offered tone after data released from the US showed weekly jobless claims rose a mere 1,000 rose to 234K during the week ended May 19 as against a rise to 238K expected. Adding to this, wholesale inventories contracted 0.3% m-o-m during April as against consensus estimates pointing to 0.2% buildup. 

The positive readings, however, seems to have been negated by an unexpected rise in the US goods trade deficit, coming-in at $68.0 billion for April from previous month’s $65 billion and worse than $64.7 billion expected. 

Today's mixed releases did little to influence Fed rate-hike expectations, albeit remained supportive for the US Dollar’s recovery move from six month lows touched in the aftermath of not so hawkish FOMC meeting minutes. 

Meanwhile, today’s downward revision of the UK Q1 GDP numbers kept the British Pound on the back-foot and also collaborated to the offered tone surrounding the major.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet writes: "In the 4 hours chart, the pair seems unable to settle above a bearish 20 SMA, while technical indicators have turned modestly lower around their mid-lines. The pair has an immediate support around 1.2950, followed by 1.2910. Below this last the pair has scope to extend its slide down to  the 1.2860 region."

"Spikes beyond 1.3000 are still be seen  as selling opportunities, and only above 1.3060, the pair will turn bullish and attempt an extension up to 1.3120" she added further.