GBP/USD Watch: Pound Strength Fuels 1.3339 Breakout Hopes

GBP/USD is at 1.3315, hitting the top of the tightening symmetrical triangle on the 1-hour chart. Support is firm at 1.3274, buyers stepping in above 1.3305. As price coils tighter, technicals suggest a breakout is near.

The US Dollar is holding onto last week’s gains. Uncertainty over US-China trade talks is driving demand for safe-haven assets, including the Dollar.

US Treasury Secretary Scott Bessent said on Sunday he wasn’t sure if President Trump had spoken directly with President Xi, casting more doubt on earlier optimism about tariff talks.

While risk is low, markets are pricing in at least 3 Fed rate cuts by year end, capping Dollar gains.

Pound Finds Strength in Solid Retail Sales

The Pound is getting a boost from better than expected domestic data. UK Retail Sales rose 0.4% in March, beating forecasts, and 1.6% in Q1 – the best Q1 since 2017. This has eased fears of BoE rate cuts and is adding some resilience to GBP/USD.

Optimism around a UK-US trade deal is also helping. Even small signs of progress in broader trade talks are stabilizing the Pound after a wild few weeks.

Key UK data to watch today:

• CBI Realized Sales: Forecast -41, Previous -21

• BRC Shop Price Index y/y: Forecast -0.4%, Previous -0.2%

These will give more insight into consumer behaviour and inflation expectations for May.

Breakout Levels in Focus for GBP/USD

GBP/USD’s current technical setup points to a “coiling breakout” — a classic pattern where tightening price ranges often precede sharp directional moves.

A confirmed breakout above 1.3339 could open the door toward 1.3364 and even 1.3390, while failure to clear resistance risks a pullback toward the 1.3274 support zone.

Trade Setup:

• Buy Breakout: Above 1.3339

• Targets: 1.3364 and 1.3390

• Support to Watch: 1.3274

• Stop-Loss: Below 1.3243

Patience is critical. Traders should wait for a clear breakout confirmation before positioning, as false moves are common when price compression is at its peak.