GBP/USD Testing Support After UK Retail Sales Disappoint

Hello traders! In today’s technical analysis, we’ll focus on British Pound to American Dollar (GBP/USD), which continues to face selling pressure following weaker-than-expected retail sales data from the UK. This disappointing data adds to the negative sentiment surrounding the British Pound, which has been struggling throughout 2025.

The release of weaker UK retail sales figures initially triggered a sharp decline in the Pound. However, after this immediate reaction, GBP/USD has shown signs of attempting a recovery. Despite this slight bounce, the broader sentiment remains negative, largely influenced by the prevailing macroeconomic outlook.

The chart highlights two critical levels currently defining the pair’s price action:

1. Key Resistance at 1.225 (Orange Area):
   Earlier this week, GBP/USD briefly broke above this level, but the breakout turned into a false breakout, marked with a red rectangle. False breakouts are typically viewed as strong signals for movement in the opposite direction, reinforcing the bearish sentiment on the pair.
2. Key Support at 1.217 (Green Area):
   Today, the price tested this established mid-term support level. This area acts as a line of defense for buyers. A sustained hold above this level provides bulls with a chance to mount a recovery and potentially challenge higher levels.

Trading Scenarios

• Bullish Scenario:
  If GBP/USD manages to break above the 1.225 resistance, it would invalidate the current bearish setup and provide a strong signal to go long. This would indicate buyers are regaining control and could lead to a larger recovery.
• Bearish Scenario:
  On the flip side, a decisive daily close below the 1.217 support would confirm the negative sentiment and trigger a fresh sell signal, potentially targeting lower levels in the midterm.

For now, GBP/USD remains under pressure, and the next major move will depend on whether the price breaks above the orange resistance or below the green support. Traders should watch these levels closely for potential breakout opportunities in either direction.

Source: https://www.axiory.com/analytics/technical-analysis/gbp-usd-testing-support-after-uk-retail-sales-disa