GBP/USD slips below 1.3800 ahead of US retail sales, Brexit meet

• GBP/USD maintains a cautious approach and accumulates minor losses.
• Global risk uncertainties weigh on the pair.
• Investors await the US Retail Sales data while eyeing Brexit talks. 

After two days of winning shots, GBP/USD is missing the action in the Asian session. The pair peaked at 1.3795 and traveled to the intraday’s lows below the 1.3770 level. 

The move was sponsored by internal factors to the pound, as instability arises in the region after the riots held in Northern Ireland while the optimism on the ease of restriction seems to be cooling off.

At the time of writing, GBP/USD is trading at 1.3771, down 0.05% on the day.

The sterling has entered into a consolidation mood. The UK GDP outpaced expectations but the optimism didn’t last for long, as the concerns around the use of the J&J covid vaccine and the prolonged issues with the EU over Brexit still linger on the fate of the currency.

Due to the recent riots in Northern Ireland, nearly 90 officers have been hurt in the worst street violence for years. There are no specific reasons cited behind the riots, as few believe it is an act of some local criminal gangs where others related it to the issue of the Irish Sea border imposed as the result of the UK-EU Brexit deal. Following the event, the UK Brexit minister will meet his EU counterpart on Thursday to discuss the Northern Ireland Protocol and the Irish Sea border issue. The political unrest weighs on the cable and puts it on the back foot against the US dollar.

The US Dollar Index (DXY) confides near the 91.60 level after falling for three consecutive days. An uptick in the dollar index would pressurise the pair to trim the gains further.

The US dollar benefited from the ongoing political uncertainty after Taiwan’s President Tsai said Chinese military activities threaten regional peace and stability. On the other hand, China’s top official in Hongkong warns of “ countermeasures” against any foreign powers if they threaten national security. This, in turn, added to the attractiveness of the US dollar as a safe-haven asset.

Investors now set their eyes on US Retail Sales data later in the day to gauge the consumer sentiment and to seek fresh trading opportunities.

GBP/USD technical levels to consider