• GBP/USD hit 1-month high on Friday as sterling continued to benefit from broad-based U.S. dollar weakness.
• The dollar came under renewed pressure after U.S. July retail sales unexpectedly fell 0.6% month-on-month, compared with expectations for a 0.1% increase. The weak reading raised concerns about the strength of U.S. consumer demand.
• The softer retail sales data further strengthened expectations that the Federal Reserve could leave interest rates unchanged at its September meeting, reducing support for the dollar and helping GBP/USD extend its gains.
• Attention now shifts to next week’s busy UK economic calendar, with a series of key data releases expected to provide fresh signals on the outlook for the British economy and the Bank of England’s policy path.
• Immediate resistance is located at 1.3561(38.2%fib), any close above will push the pair towards 1.3612(Higher BB)
• Strong support is seen at 1.3485(Daily low) and break below could take the pair towards 1.3437(50%fib).
Recommendation: Good to buy around 1.3510, with stop loss of 1.3430 and target price of 1.3590
