GBP/USD faces selling pressure near 1.2650 resistance level

GBP/USD retreated 0.3% to 1.2625 after failing to sustain gains above the 1.2650 resistance level during European trading. Sterling weakness emerged despite broader dollar softness, as UK economic concerns outweighed positive risk sentiment. UK retail sales data disappointed with a -0.4% monthly decline versus +0.2% expected, raising concerns about consumer spending resilience. The Bank of England's increasingly cautious stance on further rate hikes has also weighed on sterling sentiment. Technical analysis shows GBP/USD trapped in a 1.2580-1.2650 range, with momentum indicators turning bearish. The pair faces immediate support at 1.2600 (psychological level) and stronger backing at 1.2580 (weekly low). A break below 1.2580 could accelerate losses toward 1.2550, while recovery above 1.2650 remains necessary to reignite bullish momentum. Traders await Thursday's UK GDP data for directional clarity.