GBP/USD posted the highest weekly close since July

GBP/USD posted the highest weekly close since early July supported by a stronger pound that was among the top performers in the currency market. On Friday GBP/USD kept gains despite the reversal rally of the US dollar against European currencies and the yen.

The pair reached on Friday 1.3351 (4-week high) but then pulled back and is was about to end the week hovering slightly below 1.3300, more than 150 pips above the level it had a week ago.

Despite rising for the third week in a row, GBP/USD still remains below a post-Brexit referendum resistance area seen around 1.3350. A consolidation on top could open the doors to more gains while if  the pair fails to break higher, a bearish correction could be expected.

Week ahead

“In the UK, focus continues to be on the economic impact of the UK’s EU vote. Post-Brexit data have so far been quite mixed but it seems that the economy rebounded in August after an initial slowing in July, perhaps because political uncertainty has declined since the appointment of Theresa May as the new Prime Minister and because the rest of Europe has been quite resilient to Brexit”, said analysts from Danske Bank.

According to them the most important release next week is the PMI service index due on Monday (they expect a rebound to 49.1). Other economic data to be released in the UK includes industrial production on Wednesday and construction output on Friday. “We would also look out for the NIESR GDP estimate for August on Wednesday, as it is usually a good predicator of actual GDP growth.” Regarding the Bank of England, on Wednesday, Mark Carney, Jon Cunliffe, Kristin Forbes and Ian McCafferty are due to participate in a hearing of the Parliament’s Treasury Committee.