GBP/USD Outlook: Bulls Pressure 1.42 Barrier After Upbeat Retail Sales, PMI Data In Focus

Technical analysis of Forex market

Cable jumped to 1.4200 zones after upbeat UK retail sales but failed to break higher, remaining within 1.41/1.42 range for the fourth straight day.

Larger bulls remain supported but face headwinds on approach to 2021 high at 1.4238 (Feb 24).

Fundamentals remain supportive for sterling as retail sales jumped above pre-pandemic levels with UK May PMI data being in focus (Composite May 62.0 f/c vs 60.7 Apr, Services May 62.0 f/c vs 61.0 Apr and Manufacturing May 60.5% f/c vs 60.9 Apr) with better than expected figures to further boost sterling.

Thursday’s bullish engulfing was a positive signal but fading bullish momentum on the daily chart and stochastics’ bearish divergence weigh on bulls.

Near-term action is expected to remain biased higher while holding above 1.41 handle, but extended sideways mode could be expected as long as 1.42 barrier caps.

Res: 1.4200, 1.4220, 1.4238, 1.4265.
Sup: 1.4161, 1.4125, 1.4100, 1.4076.