Dollar remains soft in early US session after mixed bag of US data. Headline retail sales rebound strongly by 1.4% in October versus expectation of 0.9%. However, ex-auto sales missed expectations by rising merely 0.2%. On the other hand, empire state manufacturing index dropped much more than expected to 23.5 in October, versus consensus of 28.5 in November, signaling that expansion is slowing. Dollar is still feeling the pressure from persistent strength in Gold which reached new record high of 1133.5 earlier today. Dollar index dropped to as low as 74.9 so far and remains pressured.

Japanese yen continue to stay in tight range despite stronger than expected GDP report released overnight. Q3 GDP in Japan rose more than expected by 1.2% qoq, 4.8% annualized, fastest pace in more than two years. Also, it's the second straight quarter of advance and beat expectation of 0.7% qoq, 2.9% annualized. Other data released today so far saw UK Rightmove house price dropped -1.6% mom, rose 1.6% yoy in November. Eurozone CPI dropped -0.1% yoy in October while core CPI rose 1.2% yoy.

GBP/USD Mid-Day Outlook

Daily Pivots: (S1) 1.6596; (P) 1.6651; (R1) 1.6731; More

At this point, intraday bias in GBP/USD remains on the upside and further rise should be seen to 1.6841 resistance next. As noted before, with short term rising trend line intact, rise from 1.5706 is likely still in progress. Break of 1.6814 will confirm rally resumption and should target a retest on 1.7043 resistance. On the downside, though, below 1.6516 will argue that whole rise form 1.5076 has completed. Further break of 1.6261 will confirm and turn outlook bearish.

In the bigger picture, the corrective structure of the fall from 1.7043 to 1.5706 indicates that whole medium term rise from 1.3503 is still in progress and should extend beyond 1.7043 before completion. Nevertheless, we'll continue to look for loss of momentum and reversal signal as GBP/USD enters into resistance zone of 1.7332/8236 (50% and 61.8% retracement of 2.1161 to 1.3503). Rise from 1.3503, which is treated as a correction to down trend form 2.1161 only, should be limited by this resistance zone and bring long term down trend resumption. On the downside, break of 1.5706 will signal that such medium term rise has completed and will turn outlook bearish for retesting 1.3503 low.