GBPUSD Breaks Above 1.3500 to Hit Multi-Month High on Strong UK Economic Data

Cable rose 0.5% on Friday morning and broke above the psychological 1.3500 level, reaching its highest point since February 2022.

The latest advance was driven by stronger-than-expected UK retail sales in April, which lifted risk appetite and provided fresh momentum.

A bullish continuation pattern is forming on the weekly chart, as the pair pushed through key resistance levels at 1.3434/44 (the 2024/2025 highs). A weekly close above these levels would confirm the breakout.

This week’s price action has formed a large bullish candle, likely to neutralize earlier reversal signals suggested by Doji and Hammer patterns seen over the past month.

The pair is also on course for a fourth straight month of strong gains, reinforcing the bullish structure, particularly after a bear-trap formed below the 1.3200 psychological level on the monthly chart.

The outlook remains constructive, supported by robust UK data, persistently high inflation, and a broadly weaker dollar.

A sustained break above 1.3434/44 would confirm trend continuation and open the path towards 1.3643 and 1.3748 (January and February 2022 highs), with the psychological 1.40 level coming into view.

However, overbought conditions may slow the rally temporarily, leading to a consolidation or mild pullback, which could serve as a platform for the next leg higher.

Former resistance at 1.3434/44 now acts as initial support, with additional backing at the higher base near 1.3390 on the 4-hour chart expected to limit downside attempts.

Res: 1.3500; 1.3557; 1.3600; 1.3643
Sup: 1.3484; 1.3444; 1.3434; 1.3390