GBP/USD refreshes weekly tops, inching closer to mid-1.3100s

The GBP/USD pair continued scaling higher through the early North American session and refreshed weekly tops, around the 1.3130-35 region in the last hour.

Following the previous session's intraday pullback of around 60 pips, the pair caught some fresh bids on the last trading day of the week and was being supported by a combination of factors. The British pound remained well supported by improving sentiment on Brexit trade talks, especially after Britain's chief negotiator David Frost said on Thursday that an agreement can be reached in September.

On the other hand, the US dollar remained depressed in the wake of the impasse over the next round of the US fiscal stimulus measures. Adding to this, a turnaround in the global risk sentiment led to a modest pullback in the US Treasury bond yields, which further undermined sentiment surrounding the greenback. The USD bulls seemed rather unimpressed by Friday's US monthly retail sales report.

Data published by the US Census Bureau revealed that retail sales rose by 1.2% MoM in July, short of consensus estimates pointing to an increase of 1.9%. The disappointing headline print negated an upward revision of the previous month's reading and stronger-than-expected figures excluding autos. Meanwhile, the Retail Sales Control Group climbed 1.4% in July as compared to 0.8% anticipated.

Apart from the mentioned factors, technical buying on a sustained move back above the 1.3100 area seemed to have contributed to the latest leg of a sudden spike over the past hour or so. Hence, some follow-through strength, back towards retesting the recent swing highs near the 1.3185 region, en-route the 1.3200 round-figure mark, now looks a distinct possibility.

Technical levels to watch