GBP/USD Price Analysis: Recaptures critical trendline resistance at 1.2275

• GBP/USD bulls are fighting the bearish odds, re-attempting the upside.
• UK political jitters, mixed Retail Sales data could remain a drag on cable.
• Cable bulls struggle to yield a break above the key 1.2275 hurdle.

GBP/USD is moving back and forth in a 40-pips narrow range so far this Friday, now attempting another bounce towards 1.2300.

The renewed upside in the major is fuelled by a bout of weakness seen in the US dollar across its main peers, as risk sentiment receives a fresh boost. Easing rate hike expectations from the ECB and BOE amid increasing recession risks is helping calm the market nerves.

Bulls, however, could face a hard time extending the latest uptick, as the UK political jitters remain in play. A senior Tory party member resigned after the ruling Conservative Party lost two crucial seats in the parliamentary by-elections on Friday. The latest news put PM Johnson’s leadership in jeopardy, which could undermine the sterling’s upswing.

Further, the UK Retail Sales for May came in mixed, earlier on, with the previous figures revised downwards. The discouraging fundamentals point to the BOE’s dilemma of fighting inflation while balancing the economic growth. UK Retail Sales drop 0.5% MoM in May vs. -0.7% expected

Attention now turns towards the two-tier data from the US for fresh trading impetus, as risk sentiment is likely to lead the way into the weekly close.

Looking at cable’s four-hour chart, the latest uptick in the price has taken out the falling trendline resistance at 1.2275. Should bulls manage to hold above the latter on a four-hourly candlestick closing basis, a test of the bearish 100-Simple Moving Average (SMA) at 1.2336 will be inevitable.

Ahead of that, the 1.2300 round figure will offer stiff resistance to GBP buyers. The Relative Strength Index (RSI) is pointing higher above the midline, allowing room for more upside.

GBP/USD: Four-hour chart

On the flip side, the immediate support is now seen at the 21 SMA at 1.2256, below which a sharp drop towards the mildly bullish 50 SMA at 1.2214 will be in the offing.

The next stop for sellers will be seen at the 1.2200 demand area on increased downside pressure.

GBP/USD: Additional technical levels