With traders awaiting UK Retail Sales and US PMI, GBP/USD is meeting resistance at 1.2000

The British pound has been under selling pressure against the US dollar throughout the Asian trading session as the pair attempts to break through the crucial 1.2000 barrier. The cable had previously seen a vertical up trend after buyers indicated interest from Thursday's low of 1.1890. The asset is expecting a correction, but this does not necessitate a bearish reversal.

The US dollar index (DXY) has experienced strong buying demand in the first hour of trading as investors bet on a rate hike by the Federal Reserve (Fed) next week. Given the recent drop in US long-term inflation projections, the probability of a 100 bps rate hike has unquestionably increased. However, the current pricing pressures must be handled quickly lest they have a catastrophic impact. That's why the Fed may do nothing or declare a rate hike of 75 basis points.

The US S&P PMI data will be the focus of investors for the whole of today's session. In this update, the Global Composite data stands at 51.7, down from 52.3 in the last release. It's possible that the Manufacturing PMI may fall from 52.7 to 52. There is hope that the Services PMI would rise to 52.6 from 52.7. This will keep the DXY in a weak position.

With regards to the pound, all eyes will be on the latest Retail Sales report. The economy is -5.3 percent more vulnerable than it was in the last report, which was -4.7 percent, according to a preliminary evaluation. Sales at stores have been on the rise even before the recent spike in energy costs. Due to out-of-control inflation, the forecast for retail sales should have been raised. A smaller consensus, on the other hand, indicates that demand is poor across the board and that prices will not rise over their prior level regardless of pricing pressures.