The GBP/USD pair kicks off the new week on a positive note and climbs above mid-1.2600s during the Asian session, closer to over a two-month top touched on Friday. Spot prices now look to build on the momentum beyond the 100-day Simple Moving Average (SMA) amid a weaker sentiment surrounding the US Dollar (USD).
In fact, the USD Index (DXY), which tracks the Greenback against a basket of currencies, drops to its lowest level since December 10 amid doubts about US consumer health, fueled by a disappointing sales forecast from Walmart. Moreover, worries over the impact of US President Donald Trump's tariffs on price growth and consumer spending, along with a pickup in US stock futures, turn out to be key factors undermining the safe-haven buck.
The British Pound (GBP), on the other hand, continues to draw support from Friday's upbeat UK Retail Sales, which climbed 1.7% MoM in January compared to the previous month's upwardly revised print of -0.6%. Adding to this, the UK Services PMI unexpectedly rose to 51.1 in February from 50.9 in the previous month. This, to a larger extent, overshadowed a fall in the UK Manufacturing PMI to a 14-month low level of 46.4 in February.
The GBP/USD pair, meanwhile, seems rather unaffected by the Bank of England's (BoE) gloomy outlook and remains at the mercy of the USD price dynamics. In the absence of any relevant market-moving economic releases, the fundamental backdrop suggests that the path of least resistance for spot prices remains to the upside. This, in turn, supports prospects for an extension of the recent well-established uptrend witnessed over the past month or so.
Source: Fxstreet
