GBPUSD holds steady above 1.1700 mark, moves little post-UK macro releases

• GBPUSD attracts some dip-buying near the 1.1650-1.1645 region, though lacks follow-through.
• The USD languishes near a two-month low and continues to lend some support to the major.
• Mostly better-than-expected UK macro releases fail to impress bulls or provide any impetus.

The GBPUSD pair reverses an intraday dip to the 1.1650-1.1645 region and climbs to the top end of its daily trading range during the early European session. The pair holds steady above the 1.1700 mark, or a nearly two-month high and moves little post-UK macro data.

The UK Office for National Statistics reported this Friday that the domestic economy contracted by 0.6%in September against -0.4% estimated and -0.3% previous. The disappointment, however, was offset by a better-than-anticipated Q3 print, which showed a contraction of 0.2% during the July-September period. Moreover, the yearly growth rate, coming in at 2.4%, along with the UK Manufacturing and Industrial output, surpassed market expectations and offers some support to the British pound.

The US Dollar, on the other hand, struggles to capitalize on its modest intraday uptick and languishes near its lowest level since August 26 touched in the aftermath of a softer US CPI report on Thursday. This is seen as another factor that contributes to limiting the downside for the GBPUSD pair. That said, the Bank of England's warning about a prolonged recession in the UK is holding back bulls from placing aggressive bets and acting as a headwind for spot prices, at least for the time being.

Hence, it will be prudent to wait for strong follow-through buying before traders start positioning for an extension of the recent strong recovery move from an all-time low touched in September. Traders now look forward to the US economic docket, featuring the release of the Preliminary Michigan US Consumer Sentiment Index. This, along with the US bond yields and the broader market risk sentiment, will influence the USD price dynamics and provide some trading impetus to the GBPUSD pair.

Technical levels to watch