GBP/USD is staying on the defensive, in a narrow range below 1.2750 after the UK Retail Sales disappointed with -1.2% MoM in July. A broad US Dollar pullback helps the pair stay buoyant amid a tepid risk sentiment. The Relative Strength Index (RSI) indicator on the 4-hour chart retreated to 50, reflecting the loss of bullish momentum. Nevertheless, GBP/USD continues to trade outside the descending regression channel coming from July, possibly discoursing sellers from betting on an extended decline. 1.2700 (psychological level, upper limit of the descending channel) aligns as first support. A 4-hour close below that level could pave the way for another leg lower toward 1.2650 (static level) and 1.2615 (August 15 low, mid-point of the descending channel). Looking north, the 100-period Simple Moving Average (SMA) forms immediate resistance at 1.2750 before 1.2770 (Fibonacci 23.6% retracement). GBP/USD could regather bullish momentum and target 1.2800 (psychological level) and 1.2830 (Fibonacci 38.2% retracement, 200-period SMA) if it manages to flip 1.2770 into support.
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