Traders bought sterling again on Thursday and it jumped to fresh two-month highs as it was trading 30 pips above the 1.32 handle, heading into the US session.
Earlier in the day, retail sales came out above analysts’ expectations, which helped sterling to accelerate higher. The yearly basis slowed from 3.8% to 3.3% (but above 2.3% expected), while the monthly change also weakened to 0.3% from 0.9% (but again above consensus of a -0.2% print).
Later in the day, the usual Thursday’s US jobless claims are due and are seen rising slightly, however, claims are still near 40-year lows so there should not be any elevated volatility afterward.
The greenback remains under pressure broadly, which is pushing the pound higher as well and this trend could continue for the rest of week. The resistance for now appears to be at around 1.3220, where yesterday’s highs are located and if conquered, the cable might rise toward 1.3250, or possibly the 1.33 level.
On the downside, the support could be seen near 1.31 and as long as sterling trades above, the outlook seems bullish. Breaking below could send the pound back to the 1.30 level.