The pound was among the top performers on Tuesday, it surged against the euro gaining support. Regarding data, an indicator of UK retail sales showed in March the largest decline since April 2015. The inflation numbers, showed the CPI up 0.4% in March (above the 0.3% expected) and the annual rate of 2.3% while producer prices were slightly higher than expected. On Wednesday employment data will be released.
The GBP/USD pair managed to erase the negative momentum that was prevailing and rose toward a key short-term resistance located around the 1.2500 handle. That area capped the upside so far. Momentum still favors the upside, but the pound needs to break above 1.2500 to clear the way to more gains and target 1.2530 first and 1.2555 then. Failure to break above 1.2500, could lead to a correction with support at 1.2430. A sharp decline, not seen at the current moment, that pushes the price below 1.2390, would favor a bearish acceleration.
Support levels: 1.2450 1.2420 1.2375
Resistance levels: 1.2505 1.2550 1.2555 1.2595