GBP/USD surrenders UK data-led modest gains, turns neutral around 1.2925 level

   •  Upbeat UK GDP/trade balance data provides a short-lived boost.
   •  Investors seemed reluctant despite positive Brexit rhetoric.
   •  Focus shifts to Tuesday’s UK monthly employment details.

The GBP/USD pair struggled to build on an early uptick and has now retreated around 20-30 pips from an intraday high level of 1.2955.

Today's better-than-expected UK monthly GDP growth figures and trade balance data did provide a minor lift to the British Pound, albeit was capped by weaker manufacturing and industrial output figures. The pair, however, failed to capitalize on the up-move and the bulls also seemed uninspired by a modest US Dollar retracement. 

The pair's inability to benefit from upbeat economic data/weaker USD clearly indicates investors' reluctance to place any aggressive bets despite recent positive Brexit rhetoric by the EU's chief negotiator Michel Barnier, saying that the EU is open to discussing other backstops regarding the Irish order.

Moreover, low expectations from tomorrow's UK jobs report, anticipated to show some renewed slowdown in employment growth and depressed real wage growth, could also be one of the factors keeping a lid on any meaningful up-move for the British Pound. 

Hence, it would be prudent to wait for a strong follow-through buying beyond 50-day SMA strong barrier, currently near the key 1.30 psychological mark, before traders start positioning for any further near-term up-move for the major.

Technical levels to watch

Momentum above mid-1.2900s is likely to get extended towards 1.2975-80 intermediate resistance ahead of the key 1.30 hurdle. On the flip side, sustained weakness below the 1.2900 handle might turn the pair vulnerable to slide further towards 1.2860-55 support area en-route the 1.2800 round figure mark.