GBP/USD rises to 1.2865 on tariff hopes and UK data surprises

GBP/USD advanced 0.25% to 1.2865 during European morning trade, supported by progress in EU-US tariff negotiations and better-than-expected UK economic data. Sterling found additional support from positive risk sentiment as trade tensions showed signs of easing, with EU officials expressing optimism about reaching an agreement before the August 1 deadline. UK retail sales data surprised to the upside, showing a 0.5% monthly increase versus 0.3% expected, indicating consumer resilience despite elevated interest rates. The pound's strength comes despite ongoing Bank of England uncertainty regarding the pace of future rate cuts. Technical analysis shows GBP/USD breaking above the 1.2850 resistance level, with next target at 1.2900. Immediate support has formed at 1.2835, the previous resistance turned support. Continued progress in trade talks could propel the pair toward 1.2920, while any setback might trigger a retreat to 1.2800.