GBP/USD came under bearish pressure in the early European session after the data from the UK showed an unexpected contraction in September Retail Sales. However, the British pound managed to pare its losses with the Markit PMI figures surpassing analysts' estimates.
GBP/USD tested the lower limit of the ascending regression channel after the disappointing Retail Sales data, but this level stays intact for the time being. Additionally, the Relative Strength Index (RSI) indicator is edging higher towards 60 on the four-hour chart , suggesting that sellers are struggling to retain control.
In case the pair breaks below 1.3780 (trend support) and makes a daily close there, the technical outlook could turn bearish. In case that happens, a slide towards 1.3760 (static level) and 1.3700 (psychological level, 200-period SMA) could be witnessed.
On the other hand, the middle line of the channel is forming the first resistance at 1.3820 ahead of 1.3840/50 (static level, upper line of the channel) and 1.3880 (static level).