GBP/USD rallies 0.5% as UK retail sales surge unexpectedly

GBP/USD jumped 65 pips to 1.2745 after UK retail sales surged 3.4% in April, dramatically exceeding the 0.4% forecast and marking the strongest growth in three months. The data suggests UK consumer resilience despite ongoing cost-of-living pressures, with clothing and household goods leading gains. Sterling strength was further supported by improving consumer confidence indicators and expectations that the Bank of England may maintain higher rates longer than peers. The pair broke above key resistance at 1.2720, opening the path toward 1.2780 and potentially the psychological 1.2800 level. Volume indicators confirm strong buying interest, while the RSI at 68 approaches overbought territory. Immediate support has formed at 1.2720 (former resistance), with deeper support at 1.2680. The robust retail data reinforces the UK's economic outperformance narrative, potentially attracting further sterling buyers.