•GBP/USD pared earlier gains as investors digested weak UK retail sales data showed the biggest monthly drop since December 2023, following strong spending in April.
• Data showed,UK retail sales volumes saw their steepest decline since December 2023 in May, as consumer demand eased following a spending surge in April, official data showed Friday.
• UK retail sales volumes fell 2.7% in May, far exceeding the median forecast of a 0.5% drop, according to the Office for National Statistics.
• The data was released alongside government borrowing figures, which showed a slightly larger-than-expected budget deficit of £17.7 billion ($23.88 billion) for May.
• Technical indicators support a bullish outlook, with RSI holding steady at 50 and the pair trading above the 5-, 9-, and 11-day moving averages.
• Immediate resistance is located at 1.3597(23.6%fib), any close above will push the pair towards 1.3649(Higher BB)
• Strong support is seen at 1.3389(38.2%fib) and break below could take the pair towards 1.3214(50%fib).
Recommendation: Good to buy around 1.3450 with stop loss of 1.3350 and target price of 1.3560
