GBP/USD sellers poke 1.1200 support with scrutiny on UK politics, Retail Sales

• GBP/USD remains mildly offered as bears attack short-term key support.
• Political turmoil in the UK escalates after PM Truss’ resignation, fresh elections is to be held on Monday.
• Hawkish bets on the BOE failed to impress pair buyers amid multi-year high US Treasury yields.
• UK Retail Sales are the key to recall buyers amid strong inflation.

GBP/USD takes offers to renew intraday low near the 1.1200 support confluence as traders await the UK Retail Sales during early Friday. Other than the pre-data jitters, the political crisis in Britain also weighs on the Cable pair amid upbeat US Dollar Index (DXY) and firmer US Treasury yields.

Liz Truss resigned from the UK’s Prime Minister’s post after serving the shortest tenure as the national leader. Truss’ fall was mainly linked to the downbeat fiscal policies conveyed in the “mini-budget” and the British dislike for the same, which in turn raised concerns for the return of Boris Johnson as UK PM. It’s worth noting that Reuters said, “The Conservative Party, which holds a big majority in parliament and need not call a nationwide election for another two years, will now elect a new leader by Oct. 28 - Britain's fifth prime minister in six years.”

Elsewhere, the UK’s GfK Consumer Confidence improved to -47 in September versus the record low of -49 marked the previous month, as per the latest data release on Friday. Following the data, Reuters stated that confidence among British consumers remained close to the lowest level on record this month with households facing double-digit inflation, rising interest rates and political chaos, the survey showed on Friday.

It is important to know that the UK’s headline inflation jumped to the multi-year high near 10.0% earlier in the week and hence propelled the odds of the Bank of England’s (BOE) faster/heavier rate hikes. Hence, today’s UK Retail Sales, expected to improve to -0.5% MoM in September versus -1.6% prior, will be crucial for the GBP/USD buyers as a firmer number could defend the pair from breaking the immediate key support.

Even so, hawkish Fedbets and multi-year high US Treasury bond yields could join the hawkish Fedspeak to weigh on the quote. Furthermore, political developments in the UK will be crucial to watch for fresh impulse.

Technical analysis

An upward-slopping trend line from September 28 joins the 10-DMA to restrict immediate GBP/USD downside around 1.1200. The pair buyers, however, remain uninterested unless the quote crosses the five-week-old resistance line, near 1.1330 by the press time.