GBP/USD strengthened on Friday as solid retail sales offset the impact of geopolitical risks.
• The pair recovered notably from the 1.3455 low, as upbeat UK retail sales data provided a bullish boost to sentiment.
• Even with today’s rebound, soft inflation expectations from the Bank of England could limit sterling’s upside as tensions in the Middle East cool..
• The Bank of England is set to meet on Thursday, with money markets pricing in a rate hike by year-end, though no change is expected at next week’s meeting.
• Immediate resistance is located at 1.3530(50%fib), any close above will push the pair towards 1.3596(April 17th high)
• Strong support is seen at 1.3455(Daily low) and break below could take the pair towards 1.3407(SMA20).
Recommendation: Good to buy around 1.3720, with stop loss of 1.3660 and target price of 1.3800
