• GBP/USD gained some traction on Friday after figures showed UK retail sales unexpectedly rose in August.
• British consumers unexpectedly increased their spending in August, despite cutting fuel purchases as prices surged following the resumption of the Iran war, official data showed on Friday..
• UK retail sales rose 0.5% month-on-month in August, defying expectations for a 0.2% drop and signaling that consumer spending remained resilient amid uncertainty linked to the Gulf conflict.
• The figures follow the Bank of England’s decision a day earlier to keep interest rates unchanged, while warning that a prolonged Iran war could lead to higher borrowing costs.
•Money markets are pricing in a roughly 65% chance of a rate hike in November and anticipate around four 25-basis-point increases by the end of 2027
• Immediate resistance is located at 1.3390(Daily high), any close above will push the pair towards 1.3454(50%fib)
• Strong support is seen at 1.3318(38.2%fib) and break below could take the pair towards 1.3138(23.6%fib).
Recommendation: Good to sell around 1.3400, with stop loss of 1.3450 and target price of 1.3360
