GBPUSD is rising after a brief but sharp retreat triggered by the recent tariff-related news flow. The UK received a relatively favorable position, facing only a 10% tariff from the U.S. However, the impact on the economy will still be significant. Last week’s steep sell-off in the pound compared to the euro likely reflected an overreaction. 

Recent UK data could offer some support to GBP outlook. Last week, both GDP and industrial production figures came in much stronger than expected. The labor market also remains relatively solid, with high real wage growth and low unemployment. 

However, some signs of weakness have emerged. Employment dropped by 78,000 in March, the largest decline since the COVID shock. In contrast, the average monthly job gain over the past three years was 33,500. Growth in average earnings also slowed, with the latest figures revised down to 5.6%. 

While this data may not be enough on its own to shift policy, it is likely to give the Bank of England a “go-ahead” signal to cut rates at the May meeting. 

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GBPUSD is approaching a key resistance level. The 76.4% Fibonacci retracement which capped advances in both September and October, remains a critical medium-term resistance. If this level holds again, it could confirm the activation of a new downtrend. 

The white trendline connecting the highs from June 2021 and September–October 2024 is also about to be tested for the third time. A third rejection would strengthen its technical significance and suggest that the market recognizes it as a valid trendline. 

The 1.33–1.34 zone is the key weekly resistance area to watch. As long as it holds, GBPUSD is expected to face downward pressure, potentially moving toward the zone where the 100- and 200-week moving averages converge.