UK Retail Sales rose a solid 2.1% in January, well ahead of expectations, after run of soft data in Q4, Scotiabank's Chief FX Strategist Shaun Osborne notes.

Intraday price action looks soft

"But PMI data were mixed, with soft Manufacturing weakening further (46.5) while Services improved slightly to 51.1. The Composite index eased a tenth to 50.5 (from 50.6 in January). The data support the outlook for some additional—cautious—BoE easing ahead, in line with messaging from top policymakers recently."

"GBP pushed higher yesterday to secure a close above its 100-day MA (1.2650), the first since November. Note the 100-week MA sits at 1.2652 currently. Intraday price action looks soft today, however, suggesting some risk of a 'false break'; loss of interim support at 1.2630 in the next couple of sessions may see the pound ease back more. Support is 1.2550/75."