GBP/USD in focus as UK Retail Sales expected to rebound in May

GBP/USD faces a key catalyst during Friday's European session as traders await the release of the UK Retail Sales report for May. The data is expected to show a significant recovery, with headline retail sales forecast at 0.5% month-over-month, a sharp turnaround from the -1.3% decline recorded in April. The Retail Sales Ex-Fuel measure is also anticipated to improve, with consensus at 0.4% versus the prior month's -0.4% reading. A stronger-than-expected print could bolster sterling by reinforcing expectations that the Bank of England may maintain a cautious approach to rate cuts, while a miss could weigh on GBP pairs. Beyond UK data, the session is relatively light on major economic releases, placing outsized importance on this single report for near-term GBP direction. Traders should monitor the immediate reaction in GBP/USD, as a beat on expectations could push the pair toward nearby resistance levels, while disappointing figures may trigger a pullback toward recent support zones.