Cable's fall like a rock or rocket skyhigh?

British pound was one of the fastest growing currencies this past week, gaining 1.58% versus U.S. Dollar. Last time when we’ve seen the sterling above 1.3900, was the Brexit vote day in June 2016. On the fundamental front, except the USD weakness, analysts underline potential agreements between UK and EU for ‘softer’ divorce deal. This outcome of the historical decision could help British economy to avoid aftershocks and uncertainty, creating additional demand the currency, which has been undervalued during last 18 month.
Economical reports were mixed last week though: strong CPI in line with the expectations at 3.0% YoY in December, stronger-than-expected PPI, and disappointing Retail Sales declining 1.5%, the largest drop in 7 months. Next week direction will have an impact from Unemployment and Earnings figures and Q4 GDP report.

Trading sterling assets is traditionally lucrative, with the proper risk management due to high volatility. Most of the last week’s profits came from GBP/USD, GBP/JPY and GBP/NZD pairs. Potential technical retracement is likely, which should give traders a chance to consider re-entering to long positions, following the long-term uptrend.