The pound climbs above 1.2900 on strong economic data

The pound reached its highest level since July 25 on Friday, driven by improved risk sentiment following positive U.S. economic data on Thursday, including jobless claims and retail sales, as well as strong UK retail sales that eased recession concerns.

Sterling also found support from the Bank of England’s still hawkish stance, with market expectations for another rate cut—following the 25 basis point reduction on August 1—remaining below 50%.

Fresh bullish momentum broke the 1.2900 level (also the 61.8% Fibonacci retracement of the 1.3044 to 1.2664 decline), as Friday’s surge indicated the continuation of the recovery from the August 8 low of 1.2664 after a brief two-day consolidation.

Bullish daily indicators support this move, although overbought conditions could pose short-term challenges.

To maintain bullish momentum, near-term price action needs to hold above 1.2854 (the broken 50% retracement and daily Kijun-sen). A close above 1.2900 would strengthen the outlook for further gains toward 1.2954 (the 76.4% Fibonacci retracement) and the psychological 1.3000 level.

Res: 1.2914; 1.2954; 1.3000; 1.3044
Sup: 1.2873; 1.2854; 1.2820; 1.2790