British pound price trades near $1.324 as rally cools ahead of Easter holiday
GBP/USD consolidates below 1.33 as U.S. dollar recovers on trade optimism
The British Pound retreated slightly from the 1.33 handle on Thursday, trading near 1.324 during European hours as traders booked profits following a sharp seven-day rally. Sterling reached a six-month high against the U.S. Dollar earlier this week, fueled by soft UK inflation data and a broadly weaker greenback amid easing global economic concerns.
GBP/USD pulled back as the U.S. Dollar Index (DXY) rebounded to 99.5, supported by optimism around U.S.-Japan trade talks. Traders interpreted the progress as a sign that President Trump’s tariff agenda may shift toward bilateral deals, potentially calming global trade uncertainty.Meanwhile, the UK macroeconomic backdrop remains mixed. March CPI data came in softer than expected, with headline inflation falling to 2.6% and services inflation easing to 4.7%. The data reinforced expectations of Bank of England rate cuts, with markets now pricing in up to 86 basis points of easing by year-end. Despite this, UK wage growth remains robust, while GDP growth is holding up in the face of rising employer taxes.
GBP/USD price dynamics (March 2025 - April 2025) Source: TradingView.
Technical structure intact above 1.32
Sterling continues to find support above the early April swing high of 1.3206. Intraday lows on Thursday briefly dipped to 1.3205 but were quickly bought up, suggesting buyers remain active near this zone. The pair rebounded into the 1.3222 to 1.3245 resistance area, and a break above could see the pair retest the April 16 high at 1.3292. Further strength may open the door toward the 2024 high of 1.343 and the psychological 1.35 level.
Momentum indicators remain constructive, with the 14-day RSI hovering near 70. All major EMAs on the daily chart slope upward, supporting the bullish bias. However, with UK and U.S. markets set to close for the long Easter weekend, traders may adopt a more cautious stance, limiting further upside in the near term.
Sterling's strength has been bolstered by a combination of cooling inflation, resilient economic data, and fading dollar appeal. As highlighted earlier this week, a break above 1.3292 could validate a push toward multi-year highs if supported by volume.
