Sterling Rises as Dollar Stalls, UK Retail Beats

Key Moments

GBP/USD Rises as Dollar Index Pulls Back

The GBP/USD pair reversed earlier weakness and moved into positive territory around 1.3490 during the European session on Friday. The recovery in the pair accompanied a modest retreat in the US Dollar (USD) after a three-day winning streak.

At the time of writing, the US Dollar Index (DXY) – which measures the USD against six major peers – trades 0.1% lower, hovering near 98.70. The Greenback has come under some pressure ahead of the United States market open, although its broader tone remains supported by elevated oil prices.

Concerns over a potentially extended shutdown of the Strait of Hormuz – described as a crucial route for nearly 20% of global energy shipments – are helping keep crude prices firm, lending underlying support to the USD even as it consolidates recent gains.

Policy Outlook: Fed and BoE in Focus

Market participants are now looking ahead to monetary policy announcements from the Federal Reserve (Fed) and the Bank of England (BoE), both scheduled for next week. Current expectations are that neither central bank will adjust interest rates, while emphasizing ongoing upside risks to inflation in the context of Middle East tensions.

UK Retail Sales Surprise to the Upside

Earlier in the session, fresh data from the United Kingdom (UK) provided support to the Pound Sterling. March Retail Sales, a key gauge of consumer demand, increased by 0.7% Month-on-Month (MoM), exceeding the 0.2% market estimate.

The previous month’s reading was revised lower, with February Retail Sales now reported at -0.6%, down from the earlier -0.4% figure. The stronger March result contrasts with the prior month’s decline and is typically interpreted as a constructive signal for the Pound.

GBP/USD Technical Picture

GBP/USD trades higher around 1.3490, maintaining a constructive short-term technical tone. The pair is holding above the 20-day Exponential Moving Average (EMA) at 1.3449, as well as above the 38.2% Fibonacci retracement at 1.3432 of the 1.3161–1.3870 move.

The Relative Strength Index (14) stands at 55.2, remaining above the neutral 50 threshold. This positioning suggests that bullish momentum persists as price action approaches the 50% Fibonacci retracement level.

On the upside, initial resistance is seen at the 50% Fibonacci retracement at 1.3515, followed by the 61.8% level at 1.3599. Above these, additional resistance levels are noted at 1.3718 and the recent high at 1.3870.

On the downside, first support is aligned with the 20-day EMA at 1.3449, ahead of the 38.2% retracement at 1.3432. A more pronounced decline would bring the 23.6% retracement at 1.3328 into view, followed by the 1.3161 swing low.

(The technical analysis of this story was written with the help of an AI tool.)

UK Retail Sales Indicator Detail

The Retail Sales data, released by the Office for National Statistics on a monthly basis, measures the volume of sales of goods by retailers in Great Britain directly to end customers. Changes in Retail Sales are widely followed as an indicator of consumer spending. Percent changes reflect the rate of changes in such sales, with the MoM reading comparing sales volumes in the reference month with the previous month. Generally, a high reading is seen as bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.