The pound ended lower on Friday after posting a sharp jump following the "no" vote in the Scottish referendum, weighed down by profit-booking, but the prospects are good for the currency in the near future.
Even though the Fed rate hike hint that has broadly strengthened the greenback weighs on the GBP/USD, prospects of a sooner rate hike by the Bank of England will help break of the 1.7 resistance line of the pair.
Now that fears of the UK economy having to bear additional fiscal burden in case the Scottish vote was "yes" no longer exist, traders will focus on positive UK data and stay bullish on the currency.
The upcoming week is light on the data calendar for the pound with no major releases scheduled.
The BBA mortgage approvals and public sector net borrowing data for August are due on Tuesday followed by Nationwide house price data for September on Thursday. On Friday, August consumer credit data will be published.
There are important data points towards the end of the month with the GfK consumer confidence figures for September and August net lending to individuals due on the 28th and the 29th. The next day the current account data and GDP figures will be out.
The GBP/USD rallied to a two-week high of 1.6525 on Friday following the referendum outcome but fell to 1.6290 by the end of the session, resulting in a 0.65% fall from the previous close.
The pair had broken above the 38.2% Fibonacci retracement of the July-September selloff before giving back the gains on profit-booking.
A reversal will first aim at Friday's peak of 1.6525 and then the 50% level at 1.6625.
However, the 50-day simple moving average near 1.6677 is likely to form a strong resistance zone with the 50% line, a break of which will resume the uptrend since July last year.
Then come 1.6757, the 6.18% line, followed by 1.6920 and 1.6998 ahead of a retest of the July peak of 1.7192.
On the downside, the 23.6% level at 1.6325 is a main support line and closing break of the same on Friday has weakened the uptrend since 10 September.
The next level on the downside is 1.6162, a break of which will expose the 10 September low of 1.6052, which comes slightly off the 50% Fibonacci retracement of the one-year rally through July 2014.
Further south, the zone formed by 1.5854 and the 61.8% line of 1.5752 will be important as a break of that will lead the pair to the 2013 low of 1.4813.