GBP/USD consolidates in a range above 1.3300 mark, ignores upbeat UK Retail Sales

• GBP/USD struggled to gain any meaningful traction and remained confined in range.
• Upbeat UK Retail Sales data also did little to impress traders or provide any impetus.
• COVID-19 jitters and the risk-off mood held back bulls from placing aggressive bets.

The GBP/USD pair held steady around the 1.3320 region through the early European session and had a rather muted reaction to the UK macro data.

A combination of diverging forces failed to provide any meaningful impetus to the GBP/USD pair and led to a subdued/range-bound price move on the last trading day of the week. The Bank of England delivered a surprise rate hike on Thursday, which, in turn, was seen as a key factor that underpinned the British pound. Apart from this, better-than-expected UK Retail Sales data extended some support to the major amid the prevalent US dollar selling bias.

The UK Office for National Statistics reported that the total value of inflation-adjusted sales at the retail level increased 1.4% in November. This was well above consensus estimates for a reading of 0.8% and 1.1% rise reported in the previous month. That said, worries about the economic risks stemming from the Omicron outbreak held back bulls from placing aggressive bets and kept a lid on any further gains for the GBP/USD pair, at least for now.

Meanwhile, the USD prolonged the post-FOMC retracement slide from the vicinity of a 16-month high and remained on the defensive through the first half of the trading on Friday. This, in turn, acted as a tailwind for the GBP/USD pair. Meanwhile, the risk-off impulse in the markets and the Fed's hawkish outlook extended some support to the safe-haven greenback. This, in turn, warrants some caution before positioning for any further appreciating move.

It is worth recalling that the Fed on Wednesday announced that it would double the pace of tapering to $30 billion per month. Moreover, the so-called dot plot showed that officials expect to raise the fed funds rate at least three times next year. This, in turn, supports prospects for the emergence of some dip-buying around the greenback.

Technical levels to watch