GBP/USD sticks to gains above 1.29 handle post US data

After a quick retracement from early European session highs, the GBP/USD pair regained traction near 1.2915 area and had a muted reaction to the US economic data.

The pair oscillated within a narrow trading range after data released from the US showed that the price of finished goods and services sold by producers (PPI) rose 0.1% in June, while yearly rate fell to the Fed's 2.0% target. 

The readings bettered expectations but were negated by core PPI (excluding food and energy prices) growth, which fell short of market expectations and eased to 0.1% on a monthly basis, 2.0% y-o-y. 

Other data showed weekly jobless claims fell less than expected to 247K during the week ended July 7 as compared to previous week's 250K (revised higher from 248K) and an expected drop to 245K.

Today’s mixed US economic data did little to provide any immediate respite for the US Dollar bulls, with the pair holding comfortably above the 1.2900 handle. 

Investors now turn focus to the Fed Chair Janet Yellen’s second day of testimony and Federal Reserve Governor Lael Brainard’s speech later during the day. 

   •  Fed: Yellen was dovish yesterday? - BBH

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet writes, "the upward potential is soft according to the 4 hours chart, as the Momentum indicator remains flat around its 100 level, while the RSI indicator turned south around 56, yet with the price holding above its 20 SMA and 200 EMA. At this point, the pair needs to extend its decline below 1.2900 to return to the 1.2860 region, the 38.2% retracement of the latest bullish run, en route to 1.2810, this week low. Above the daily high, the pair can approach to 1.3000, but selling interest around this last will likely reject the advance."