The exchange rate of GBP to USD has been trading in a 3 cent range this year and continues to bounce between the bottom at 1.25 and the top at 1.28. There was an attempt to break the range in early March as buyers pushed the price close to 1.29, but there was no follow-through and this forex pair reversed back down falling to the 200 SMA (purple).

GBP/USD Chart Daily – Facing the 20 SMA After the Bounce Off the 200 SMA

GBP/USD found support at the 200 SMA 1.2665 after the downtrend in March, and it bounced off this key moving average on the 4-hour chart. The 100 simple moving average (green) at 1.2670 was broken, but the 20 SMA (gray) at 1.2683 on the 4-hour chart held and rejected the price. On Friday, we saw a dip after the US Non-Farm Employment NFP but the price reversed back up pretty fast, and the daily candlestick closed as a hammer, with a long wick at the bottom, which suggests that the demand for the Pound was strong.

On Monday the price continued higher, but the 20 SMA stopped GBP/USD once again, so the cable ended the day just below this moving average. Early in the morning, we had the BRC Retail Sales Monitor from the UK.

The British Retail Consortium (BRC) Retail Sales Monitor

• Total sales increased by 3.5% year-on-year, compared to a 1.1% increase in February.
• Like-for-like sales rose by 3.2% year-on-year, compared to a 1.0% increase in February.

The BRC noted that total retail spending figures are not seasonally adjusted and reflect the early timing of Easter Sunday on March 31, more than a week earlier than in 2023. BRC chief executive Helen Dickinson attributed the improvement in retail sales growth last month to the early Easter and the subsequent uplift in food sales in the week preceding the long weekend.

In addition, Barclays UK March Consumer Spending data showed:

• A 1.9% year-on-year increase in consumer spending, unchanged from February.
• This represents the joint-smallest increase since September 2022.

Overall, these reports indicate a significant uptick in retail sales in March, driven partly by the early Easter timing. However, consumer spending growth remained relatively subdued compared to previous months.

GBP/USD Live Chart