On Thursday, the pound rose to a one-week high against US dollar as the exceeding forecasts of British retail sales contributed to the increase in optimism about the strength of the British economy.
During European morning trade, the GBP/USD pair reached 1.5508, the highest level since October 15, and subsequently consolidated at 1.5489, rising 0.48%.
The pair is likely to find support at 1.5338, the low of September 22, and resistance at 1.5569, the high of September 21.
The UK Office for National Statistics reported on Thursday that retail sales last month rose 1.9%, confounding forecasts of a gain by 0.3%. The retail sales in August fell 0.4%, the figure being revised down from a gain of 0.2%.
In annual terms, retail sales in September rose 6.5%, beating the forecast of a growth by 4.8%, after rising 3.5% in August.
Core retail sales, excluding cars, jumped last month by 1.7%, well above the forecast on increase by 0.3%, after falling 0.7% in August.
The data came a day after Bank of England Governor, Mark Carney, warned of possible dangers related to the membership of UK in the European Union, while the country prepares for a referendum on joining the single market.
Carney also noted the benefits of EU membership, which can increase, as he said, the dynamism and openness of the UK economy during the "greater part" of four decades, referring to the period of UK as part of the European Union.
The comments came amid fears that David Cameron promises about a referendum by the end of 2017 could really cause the UK exit from the EU.
Sterling also rose against the euro; EUR/GBP went down 0.70% to 0.7301.
On Thursday, euro showed a decline against the US dollar after the European Central Bank kept interest rates unchanged, as investors await comments from ECB President, Mario Draghi.
During European trade, EUR/USD reached 1.1303, the lowest level since October 18; the pair subsequently consolidated at 1.1315, shedding 0.21%.
The pair is likely to receive support at 1.1265, the low of October 2, and resistance at 1.1397, the high of October 16.
Euro slightly reacted to the decision of the ECB to keep interest rates unchanged at a record low of 0.05%, in line with market expectations.