• GBP/USD climbed to one-week on Tuesday as Trump's Greenland threats spark triggered a broad selloff in dollar.
• Heightened uncertainty around U.S. foreign policy and trade relations has weighed on the dollar, encouraging investors to rotate into alternative currencies, including sterling.
• On the domestic front, UK labour market data offered little surprise to markets. The ILO unemployment rate held steady at 5.1%, in line with expectations, while wage growth excluding bonuses remained at 4.5%, also matching forecasts.
• Meanwhile, political headlines added another layer of uncertainty after former U.S. President Donald Trump criticized the UK’s Chagos Islands agreement with Mauritius, calling it “an act of total weakness..
• Focus now shifts to retail sales data which is expected to provide fresh insight into the health of the economy and shape near-term market expectations.
• Immediate resistance is located at 1.3491(Daily high), any close above will push the pair towards 1.3550(38.2%fib)
• Strong support is seen at 1.3445(50% fib) and break below could take the pair towards 1.3346 (61.8% fib).
Recommendation: Good to buy around 1.3470 with stop loss of 1.3410 and target price of 1.3550
