The British pound bounced 200 pips from the weekly lows after the USD gives back some of the gains. At the time of writing, the GBP/USD trades above 1.3760. Moving ahead to the end of the week, the GBP traders will now be focused on Friday’s UK retail sales figures. Economists are predicting a reading of 9.6%, which would be a sharp fall from the 24.6% growth registered in June.
On Tuesday, the GBP/USD plunged to a fresh 6-month low of 1.3572 weighed down by the strong US dollar. The US dollar was remained in favour as a safe haven currency due to global growth fears and the rapid spread of the coronavirus delta variant. Furthermore, the downticks in the GBP were further bolstered after the comments from Bank of England policymaker Michael Saunders. He said last week the central bank could decide to halt its bond-buying programme early amid inflationary pressure.
Technically the overall momentum remained bullish throughout the last two sessions. In the short term, if the pair breaks above 1.3790 which would open doors towards the next resistance area of 1.3840 and above that 1.3870 is next. On the downside, the immediate support is near 1.3700/ 1.3690, and a further breakout below this area could lead the pair towards the next support level of 1.3660/40.
However, considering the recent strong rebound rally in the British pound, the US dollar movement will continue to play a vital role in this currency pair's future direction.
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