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GBP/USD testing 3-week highs near 1.5520, UK retail sales eyed

FXStreet (Mumbai) - The GBP/USD pair maintains the bid tone and hovers above the 1.55 handle in the European morning, as markets anticipate a better reading for the upcoming UK’s retail trade data.

The UK retail sales data in focus

The GBP/USD pair trades 0.16% higher 1.5517, attempting a bounce to fresh 3-week highs reached at 1.5529 on Wednesday. The pound continues to outperform the US dollar on the back of expectations of a stronger UK retail sales print due to be reported shortly.

Markets expect that the UK retail sales volumes excluding fuel slowed to a growth of 0.1% in August, after rising 0.4% in July. Total sales, including fuel, are estimated to have accelerated only slightly to 0.2%, after rising just 0.1% in July.

Moreover, the GBP/USD pair remains lifted on the back of broad based US dollar strength as risk-off sentiment dominates the European session amid lower European stocks.

On Wednesday, GBP/USD rallied 200 pips to 1.55 handle and beyond after the pound was boosted on the M & A deal chatter between Belgian drinks company AB Inbev and the UK’s SAB Miller, as reported by FT. While the impressive UK’s labour market report also supported the GBP rally.

GBP/USD Levels to consider

The pair has an immediate resistance at 1.5545 (Aug 7 High) above which gains could be extended to 1.5605 (Aug 10 High) levels. On the flip side, support is seen at 1.5500 below which it could extend losses to 1.5449 (Aug 26 Low) levels.

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