Fundamental analysis
The British pound rose above $1.347, nearing its highest level since February 2022, buoyed by encouraging economic data and easing cost-of-living pressures.
Retail sales in April surged by 1.2% month-on-month, exceeding expectations, for a fourth consecutive monthly increase, reflecting strong consumer spending despite ongoing tax increases and global trade tensions linked to U.S. tariff policies. In addition, consumer confidence improved in May, with households showing increased optimism about their finances and a greater readiness to make major purchases.
Further supporting sentiment, Ofgem announced a 7% reduction in the energy price cap starting in July, offering relief after several hikes. However, inflation remains persistently high, reaching 3.5% in April and surpassing forecasts. Markets now assign a 50% probability of a Bank of England rate cut by August, with another possible by the end of the year.
Technical analysis
The price continues to follow a strong upward trend, with the EMAs pointing higher, confirming the direction of the move. The resistance level around 1.3450, an important psychological level first reached in October 2024 and retested in April 2025, has been broken, reinforcing the strength of the bullish momentum.
By María Agustina Patti, Financial Markets Strategist at Exness
The British pound rose above $1.347, nearing its highest level since February 2022, buoyed by encouraging economic data and easing cost-of-living pressures.
Retail sales in April surged by 1.2% month-on-month, exceeding expectations, for a fourth consecutive monthly increase, reflecting strong consumer spending despite ongoing tax increases and global trade tensions linked to U.S. tariff policies. In addition, consumer confidence improved in May, with households showing increased optimism about their finances and a greater readiness to make major purchases.
Further supporting sentiment, Ofgem announced a 7% reduction in the energy price cap starting in July, offering relief after several hikes. However, inflation remains persistently high, reaching 3.5% in April and surpassing forecasts. Markets now assign a 50% probability of a Bank of England rate cut by August, with another possible by the end of the year.
Technical analysis
The price continues to follow a strong upward trend, with the EMAs pointing higher, confirming the direction of the move. The resistance level around 1.3450, an important psychological level first reached in October 2024 and retested in April 2025, has been broken, reinforcing the strength of the bullish momentum.
By María Agustina Patti, Financial Markets Strategist at Exness
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.