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Sterling Rally Eyes $1.3430 Resistance

Sterling Rally Eyes $1.3430 Resistance

The British pound has surged 4.5% against the U.S. dollar over the past nine trading sessions, with GBP/USD reaching as high as $1.3285 on Friday — its highest level in seven months. The rally has captured the attention of currency traders, who now watch the key resistance level of $1.3430.

The recent strength in sterling appears to be driven by a combination of robust UK macroeconomic data, expectations of a more accommodative Bank of England, and weakness in the U.S. dollar. Investors are increasingly pricing in the potential for a BoE rate cut as early as May 8, amid easing inflation pressures and diminishing recession risks in the UK.

Meanwhile, the dollar has come under pressure as U.S. economic uncertainty intensifies. Ongoing trade policy volatility, particularly around President Trump’s sweeping tariffs, is weighing on sentiment and raising questions about future Fed policy direction.

Technical traders are closely watching the $1.3430 resistance zone. A successful break above this level could open the door to further gains toward the $1.36 handle, while a rejection may lead to a short-term pullback or consolidation phase.

With the pound up nearly 10% year-to-date and other major currencies — including the euro and yen — also showing strength against the dollar, forex markets are signaling a broader trend of greenback weakness heading into Q2.

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