GBP/USD struggles under 1.3500, awaits UK Retail Sales

• The cable looks for early BOE's tightening amid rising inflationary pressure.
• GBP/USD remains below 1.3500, UK labour shortage remains a concern. 
• All eyes remain on the UK Retail Sales for fresh trading directives. 

GBP/USD is trading modestly flat on Friday, making the pair's journey towards the 1.3500 level hard ahead of key UK Retail Sales data.

The cable is trading at 1.3487, down by 0.02%, at the time of press.

As the inflation soars to a 10-year high of 4.2% in the UK, the Bank of England (BoE) is burdened with the pressure to increase interest rates in their next month's meet. As a result, investors are keenly waiting, in fact, they are quite hopeful that the BoE's decision on rate hike will be in their favor.

It is worth mentioning that the ongoing labour shortage in the region is likely to pressure the BoE further to increase rates before any of its peers.

Other than this, Brexit talks continue to loom over GBP/USD. A prolonged delay in talks is already affecting the UK's local businesses, resulting in the decline of the regional currency, the pound.

On the other hand, the COVID-19 crisis remains a challenge to the GBP/USD bulls. The pair, however, remain somewhat hopeful with the UK employment report and inflation figure. The US dollar's two-day pullback tracked by the soft US T-bond yields amid prospects for an early policy tightening by the Fed cushioned the GBP/USD pair.  

Previously, the US Philly Fed Manufacturing Index jumped to 39 in November against consensus estimates, pointing to an uptick to 24 from 23.8 in the previous month. This, to a larger extent, was offset by higher Weekly Jobless Claims, coming in at 268K during the week ended November 12. It lent a little help to buoy the pair.

Investors now look forward to Fed Vice Chairman Richard Clarida's and Christopher Waller's speeches for fresh trading impetus. However, 1.3500 remains a critical mark, and sustained strength could extend the incentive to the cable pair.

GBP/USD technical levels