- Renewed UK consumer confidence countered the impact of high inflation and interest rates.
- UK sales experienced a remarkable 0.8% increase between February and April.
- The pound declined by 1.9% in May.
Today’s GBP/USD price analysis is slightly bullish. UK retail sales volumes surged, boosting the pound on Friday, as renewed consumer confidence countered the impact of high inflation and interest rates.
–Are you interested to learn more about forex bonuses? Check our detailed guide-
According to a report from the Office for National Statistics, sales experienced a remarkable 0.8% increase between February and April compared to the previous three months. Consequently, this marked the largest growth in the three months leading up to August 2021.
However, the pound faced a decline of 1.9% in May, potentially ending its streak of consecutive monthly gains since February. This depreciation can be attributed to heightened demand for the safe-haven properties of the US dollar among investors.
Despite UK inflation falling to 8.4% in April, lower than anticipated, core price pressures reached a 31-year high. Therefore, Bank of England policymakers have little room for complacency in addressing these prices.
Additionally, with interest rates in the UK already at a 16-year peak of 4.50%, expectations had shifted to predict a year-end rate of 5.50%. This represents a notable change from just a week ago when traders anticipated a peak of 4.80% by November.
BoE Governor Andrew Bailey expressed concerns about inflation’s persistent and challenging nature during the summer months. This was despite a drop in the headline inflation rate to single digits in April.
GBP/USD key events today
Investors are expecting two key releases from the US. The core durable goods orders will show ordering trends in the US, while the core PCE price index is the Fed’s preferred tool to measure inflation in the US.
GBP/USD technical price analysis: Retracement meets formidable resistance.
The pound has recovered slightly in the 4-hour chart. However, the general direction remains as the price trades below the 30-SMA and the RSI under 50. Bears still have control, and bearish momentum is strong.
–Are you interested to learn more about forex trading apps? Check our detailed guide-
The pullback has reached the 1.2350 resistance level, where the price could either break above to retest the 30-SMA or bounce lower and head for the 1.2300 support. Bears will be aiming to make new lows below 1.2300. The general direction and bias can only change with a break above the 30-SMA.
Looking to trade forex now? Invest at eToro!
67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.