GBP/USD fades US data-led bullish spike to 1.40 neigborhood

   •  Softer US retail sales data fails to revive USD demand.
   •  News that Britain expels Russian diplomats capped gains.

The GBP/USD pair quickly reversed a mid-European session dip to 1.3940 level and jumped back to the 1.40 neighborhood post-US macro releases.

The pair caught some fresh bids during the early NA session and was being supported by softer US monthly retail sales data, coming in to show 0.1% m-o-m contraction during February as against a growth of 0.3% expected. 

The negative data outweighed a slightly better than expected m-o-m PPI figures and did little to lend any support to the US Dollar, which remained on the back-foot amid fading Fed rate hike expectations and reviving global trade war fears.

The up-move, however, once again fizzled out near the key 1.40 psychological mark, with the latest news headlines over the expulsions of 23 Russian diplomats in the UK prompting some fresh selling at higher levels.

Technical outlook

Yohay Elam, Analyst at FXStreet writes: “The $1.4000 line is not only an essential psychological line, but it also capped the pair several times: March 13th, February 27th and February 25th. Further above, the February 26th high of $1.4070 is next, and it is followed by the February 16th high of $1.4160.”

“Looking down, $1.3935 switched positions to support. The $1.3860 is another line to watch after supporting the pair on several occasions and $1.3770, the low of March 8th, is another line to watch”, he further adds.