Pound approaches 3-year high!
GBPUSD pair is approaching a key resistance, backed by strong data.
The British economy is doing quite well and even the last elections in Scotland did not spoil the mood towards the pound. Today, retail sales figures are phenomenal. Not only in terms of year-on-year growth thanks to the base, but also a significant improvement on a monthly basis, which is related to the opening of the economy. The second thing is strong PMI readings. Manufacturing index at 66.1 points, while services at 61.8 points, with the expectation of no changes in relation to the April readings.
Technically, it’s worth noting that the GBPUSD pair is testing a very important resistance level, namely 50.0 Fibo retracement of the entire downward move which started in 2014. This resistance is important because at the beginning of 2018 this level was tested twice, after which the pound clearly began to lose. We are also currently seeing a potential double top formation. On the other hand, market sentiment towards the pound and the British economy is really good and only a strong strengthening of the dollar could lead to sharper declines.