GBP/USD flirting with low ahead of UK retail sales

After yesterday's volatile action, the GBP/USD pair came under some fresh selling pressure and has now dropped to session low near 1.2725 region.

Markets now seemed to look beyond not so dovish Fed statement and a modest pick-up in the US Dollar demand dragged the pair back to previous session's low touched in the aftermath of mixed UK labor market report.

   •  US Dollar bid near 97.00 ahead of US data

With inflation rising at the fastest annual rate for almost four years, Wednesday's disappointing wage growth data seems to have raised concerns over real economic growth of the British economy. 

Against the backdrop of impending Brexit negotiations, investors would be keen to know the Bank of England's (BoE) assessment of the recent political/economic developments and its implication on the economy before committing to the pair's next leg of directional move.

   •  BoE: Focus solely on the tone in the summary and minute – Danske Bank

Ahead of the BoE announcement, monthly retail sales data from the UK would be looked upon for some short-term momentum play. Later during the NA session, second-tier US economic releases – manufacturing data and weekly jobless claims, are due for release. 

Technical levels to watch

Immediate support is pegged near the 1.2700 handle, below which the pair seems vulnerable to head back towards UK election result-led swing lows support near 1.2635 region (also nearing 100-day SMA). 

On the upside, any recovery move now seems to confront immediate resistance near 1.2770-80 region, above which the pair could head back beyond the 1.2800 handle towards retesting dismal US macro data-led swing high resistance near 1.2820 area.