The GBP/USD currency pair has firmly crossed the key resistance level at 1.3400. Either way, this historic movement in the markets shows a huge change in market sentiment. BoE UK Inflation UK inflation jumped to 3.5% in April, reaching its highest level since January 2024. This breakout happens against the backdrop of rising inflation. Recent economic factors such as the UK rate hike shifted the bullish momentum to GBP/USD. This positive trend suggests that even better things are yet to come.
The 1.3400 level is a big psychological and structural barrier for traders. Until then, this breach represents one of the most impressive technical accomplishments. It further implies a confirmation of a bullish longer-term trend for the currency pair. GBP/USD analysts expect GBP/USD is about to begin a wave 2 corrective phase. This move follows the end of wave 1 as currently counted in its present wave formation. Such a development would signal that the market is making necessary corrections before flying high on a greater bullish recovery.
The recent price action indicates that GBP/USD might see a shallow Fibonacci retracement towards the 1.3350 to 1.3380 zone. Such a pullback could provide traders with a terrific opportunity to buy the dip. They should be doing everything they can to position themselves for a larger wave 3 rally. Such retracements are typical after large-scale breakouts and often act as re-entry points for traders expecting additional bullish continuation.
Over the past year, UK inflation has skyrocketed, driven by rising energy costs for households and persistent inflation in the services sector. That context really puts a point on the market movement we’re seeing today. The challenges posed by inflation The latest jump in inflation has rattled economic markets. Traders have been following these developments with bated breath and changing their playbooks as a result. Therefore, the breakout above the Year-To-Date highs for GBP/USD has technical analysis to thank. This price level breakout is a reflection of significant fundamental economic changes.
Potential classic A-B-C corrective pattern completed in GBP/USD. This was quickly followed by an aggressive breakout, further confirming the bullish bias for the currency pair. This pattern is indicative of the way the market consolidated before its powerful upward ascent. That fits in beautifully with the recent inflation data and other macroeconomic signals.