GBP/USD Breaks 39-Month High Above 1.2950 on UK Data Strength

GBP/USD has surged to its highest level in 39 months, breaking above 1.2950 with a 0.8% (105 pips) gain in today's session. The pound's strength is underpinned by robust UK economic data, including better-than-expected GDP growth of 0.6% quarter-over-quarter and inflation remaining sticky at 4.2% year-over-year. Growing concerns about the US fiscal deficit and its potential impact on dollar stability have accelerated the pair's upward momentum. The Bank of England's commitment to maintaining higher rates for longer contrasts with market expectations of potential Fed rate cuts by year-end, widening the yield differential in sterling's favor. Technical analysis reveals the pair has completed a corrective pullback and resumed its primary uptrend. Key resistance now stands at 1.3000 (psychological barrier), with immediate support at 1.2920 (previous resistance turned support). A sustained break above 1.3000 could open the path toward 1.3150, making this a critical level for bullish continuation.