GBP/USD trying to grind its way back to 1.34 ahead of Thursday's UK and US Retail Sales double-header

• Sterling remains optimistically bullish, though declining highs are capping upside action.
• UK and US Retail Sales for Thursday could see plenty of action.

The GBP/USD is trading just shy of the 1.3400 major handle ahead of Thursday's London market session.

The latest Brexit vote in the House of Lords tipped towards a tougher Brexit scenario after Prime Minister Theresa May managed to win the vote at the last minute, eliminating some of the British parliament's ability to step into Brexit negotiations if a preliminary vote in August fails. Inflation figures also came out slightly worse than expected, with the y/y Core CPI figures coming in at 2.4%, just skirting below market expectations. 

Despite this, the Sterling managed to recover its trading stance, and bounced back even after a rate hike from the US Fed saw the US interest rate lift by 25 bps. The GBP is still lifting in early Asia trading for Thursday, and the GBP/USD is on a somewhat positive note heading into today's Retail Sales figures, though Wednesday's action did punch in a new recent low.

At 08:30 GMT Year-on-year Retail Sales for May are expected to come in at 2.4%, a fair tick higher than the previous reading of 1.4%, while m/m Retail Sales for May (excluding fuel) are expected to come in at 0.3%, lower than the last print of 1.3%.

Following that will be US Retail Sales, slated for 12:30 GMT. Retail Sales excluding autos for the month of May is expected to come in at 0.5%, a minor uptick from the last reading of 0.3%. Economic data for the US has been pumping out nicely as of late, though a downturn in reported figures would be terribly timed, with the Fed having just raised interest rates.

GBP/USD Levels to watch

Bearish action has been the overall theme of the GBP/USD charts despite repeated bouncebacks from recent lows, and as FXStreet Chief Analyst Valeria Bednarik noted, "the 4 hours chart for the pair favors additional declines ahead as, despite multiple attempts, it was unable to advance beyond a bearish 20 SMA, while technical indicators accelerate their slides below their mid-lines. A break below the daily low should lead to a continued advance towards 1.3265, while further weakness exposing the 1.3220 region."

Support levels: 1.3310 1.3265 1.3220  

Resistance levels: 1.3345 1.3390 1.3420