GBP/USD surges to fresh post-Brexit high, taps 1.3600 ahead of US retail sales

The GBP/USD pair build on the hawkish BoE-led upsurge and moved past the 1.3600 handle for the first time since June 24, 2016, albeit has retreated over 30-pips from session tops. 

The British Pound got an additional boost on Friday after the latest comments from BoE MPC member Gertjan Vlieghe reinforced market expectations of an imminent interest-rate hike in the near future. 

Hawkish comments from a perceived dovish voter clearly indicates that the central bank is willing to look past sluggish wage growth and remove additional stimulus measures announced after last year's Brexit vote. 

   •  BoE takes charge of markets with an effective signal - ING

The market now seems to have started pricing-in a definite rate hike in November, with possibilities of additional two rate hikes in 2018 and remained supportive of strong bid tone surrounding the major.

Adding to this, a modest US Dollar retracement, despite Thursday’s stronger than expected CPI print, further collaborated to the pair's strong upsurge to fresh post-Brexit highs. 

Next in focus would be the US economic docket, with key focus on monthly retail sales, which might influence Fed rate hike expectations and eventually provide some respite for the USD against its British counterpart.

   •  US: Retail sales likely to remain unchanged m-o-m in August - HSBC

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet writes: "On June 24th 2016, and following the Brexit referendum and a 1,300 pips slide, the pair closed the day at 1.3632 a probable bullish target on a break above the mentioned daily high. Downward corrective movements are likely, but speculative interest may choose to buy on dips. Supports from here came at 1.3530 and 1.3490, ahead of the 1.3440/60 price zone."