- The GBP/USD exchange rate climbed to new highs during last week's trading, overcoming several key levels along the way, refocusing on the longer-term recovery trend on the charts.
- The upward rebound of the GBP/USD pair reached the resistance level of 1.2945, the highest for the currency pair in a month and is closer to testing the psychological resistance of 1.3000, which supports the strength of the bulls' control.
According to reliable trading platforms, the broad losses in the US dollar helped the pound ignore the mixed UK retail sales figures for July that were released earlier in the European morning, as the rise led the GBP/USD pair to regain key levels on the charts. Technically, GBP/USD rose above its 200-week moving average at 1.2845 before rising above the 61.8% Fibonacci retracement level of its July low at 1.2901 as the greenback weakened against all major currencies.
The US dollar was broadly weaker in Asia, Europe and North America, helping GBP/USD extend its previous recovery from early August lows, creating scope for further gains ahead.
Commenting on the performance of the currency pair, Sean Osborne, chief FX analyst at ScotiaBank, said: "GBP gains have picked up again after the spot price broke higher from yesterday's consolidation range." The analyst added, "Fresh short-term highs for the cable above 1.29 target additional gains towards 1.2950/1.30."
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Technical forecasts for the GBP/USD pair today:
According to trading, the GBP/USD pair has risen strongly since Tuesday when UK jobs figures came in better than expected and US producer price data indicated that further deflation may be in the making, boosting the pound and weighing on the dollar. Furthermore, a negative surprise for UK inflation had caused a setback for the pound on Wednesday, even as the US dollar weakened after another decline in US inflation, prompting markets to become more confident in a tangible cut in US interest rates from September.
However, data indicating a resilient second quarter for the UK economy helped the GBP/USD pair regain more lost ground last Thursday, even as the US dollar rose following the US retail sales report for July. Overall, the GBP/USD gains on Friday now bring a 78.6% retracement of the late July decline to 1.2965 into focus, which is the last defense of the year's high so far around 1.3047. Obviously, that will be happened ahead of public statements from Bank of England Governor Andrew Bailey and Federal Reserve Chairman Jerome Powell at the Jackson Hole symposium this week.
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