GBP/USD struggles near 1-week lows, around 1.3100 handle

• A modest USD retracement helps recover early lost ground to over 1-week lows.
• Brexit uncertainties/dismal UK retail sales data kept a lid on any meaningful up-move.
• Investors look forward to fresh Brexit-related headlines from the ongoing EU summit.

The GBP/USD pair struggled to build on its intraday recovery move from over one-week lows and is currently placed in neutral territory, just above the 1.3100 handle.

The pair, for the second time this week, showed some resilience below 100-day SMA and quickly reversed an early dip to an intraday low level of 1.3076. The uptick was supported by a modest US Dollar retracement from near two-week lows, albeit lacked any strong follow-through.

Against the backdrop of persistent Brexit uncertainties, the British Pound was further weighed down by today's worse than expected UK monthly retail sales data, showing a sharp fall of 0.8% in September, the biggest drop in six months.

Adding to this, the prevalent cautious mood across global financial markets, amid resurfacing US-China trade war fears, benefitted the USD's relative safety against its British counterpart and further collaborated towards keeping a lid on any meaningful up-move.

Despite a combination of negative factors, the downside remained limited as investors now seemed reluctant to place any aggressive bets and preferred to wait for any fresh Brexit news/developments from the second day of a crucial EU summit in Brussels.

Technical levels to watch

A convincing break below the 1.3080-75 region is likely to accelerate the fall towards the key 1.30 psychological mark with some intermediate support near the 1.3035 level. On the flip side, the 1.3130-35 region now seems to have emerged as an immediate resistance, above which the pair is likely to aim towards reclaiming the 1.3200 round figure mark.

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