GBP/USD surges past 1.30 handle after disappointing US data

Having posted a daily low at 1.2939, the GBP/USD pair recovered sharply and reclaimed 1.3000 psychological mark following the release of disappoint US economic data.

US monthly retail sales for July fell short of expectations and remained flat as compared to previous month. Meanwhile, core retail sales (excluding automobiles) contracted by 0.3%. 

Disappointing consumer spending data now seems to force the Federal Reserve to refrain from raising interest rates further during 2016 and is weighing heavily on the US Dollar across the board, triggering a sharp short-covering rally in the GBP/USD major. 

Technical levels to watch

From current levels, the pair seems to extend the short-covering rally initially towards 1.2955 intermediate resistance and eventually towards weekly high resistance near 1.3100 round figure mark. Meanwhile on the downside, 1.3000 psychological mark now seems to act as immediate support and any weakness below this immediate support might be short-lived and is likely to be bought into.