Thursday, 18 May 2017

GBP/USD finally breaks $1.30....Will it keep going?

In the last few minutes the GBP/USD cross has broken through the $1.30 barrier for the first time since 22nd September, with the currency pair currently sitting at $1.3043.

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The pound has risen across the board this morning after the latest UK retail sales figures came in much higher than forecast.

Markets were expecting an improvement after last month's reading came in at -1.8%, with forecasts suggesting sales will increase by 1.2%. However, the actual retail sales reading (produced by the Office for National Statistics) smashed the predictions, coming in at a whopping 2.3%.

As you can see from the graph below, the data which was released at 0930 BST has given the pound an immediate boost and will come as welcome news for dollar buyers, who have endured a torrid time since the referendum result in June.

GBP/USD graph

This latest move adds to the gains we have seen for the GBP/USD cross, and since mid-March the currency pair has now risen almost 7.5%.

We will have to see if the pound can hold onto the gains this morning, as often a sudden spike can lead to some profit taking by investors. But if the dollar continues to lose ground at the hands of Donald Trump and the UK economy keeps producing positive economic data we could see the GBP/USD cross keep rising now that it has broken through the latest level of resistance.

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