GBP/USD Eyes $1.3442 After 0.7% GDP Surprise—Breakout or Bull Trap?

GBP/USD is holding steady at $1.3271 after a series of positive UK economic reports have brought the pair back into focus. Thursday’s GDP figures beat expectations with Q1 GDP at 0.7% quarter-over-quarter and monthly GDP at 0.2%. Business investment surged 5.9% after -1.9% previously. Industrial and manufacturing production was weaker than forecast but overall the data was positive and has lifted GBP/USD from recent lows.

Key Levels to Watch in GBP/USD

The pair is trading just below a descending trendline that has capped price since late April and above the 50-hour EMA at $1.3276. Price is showing hesitation with MACD momentum flat and waiting for a trigger.

• Resistance at $1.3355 which was tested and rejected earlier.

• Break above $1.3355 with volume could see $1.3396 and $1.3442.

• Below $1.3260 could see $1.3218 and $1.3141.

This sets up a clear structure for both long and short plays depending on the US data.

Fed, US Data to be the Trigger

Now we wait for a flurry of US data with Core PPI, Retail Sales and Fed Chair Powell speech later today. Soft inflation and spending could put pressure on the dollar and push GBP/USD above resistance. Stronger than expected data could favour the dollar and delay rate cut expectations.

GBP/USD Trade Setup:

• Buy above $1.3355 → Targets: $1.3396–$1.3442; Stop: below $1.3260

• Sell below $1.3218 → Target: $1.3141; Stop: above $1.3270

Wait for confirmation before entering. The next move will be driven by the US data.