Pound Sterling (GBP) has shown some strength today, although it has had difficulty compared to other G10 currencies this week. According to recent data, the UK experienced a strong rise in February GDP, increasing by 0.5% month-on-month, surpassing the forecast of 0.1%.
Growth in services and construction sectors contributed to this increase, with manufacturing seeing a notable jump of 2.2%. Despite challenges in advancing, the GBP has found solid support below 1.27 and closed the week above 1.30 for the first time since October.
Economic Indicators And Market Sentiment
Resistance is identified at 1.32, while a breakthrough could lead to a target of 1.34. Support levels are noted at 1.2975 and 1.3000.
What this all tells us is fairly straightforward, yet the implications should not be taken lightly. UK GDP data has come in stronger than expected, particularly with a 0.5% increase in February, well ahead of the 0.1% most were looking for. Notably, this was not isolated to one area—the services and construction sectors both added positively, while manufacturing had its strongest single-month rise in quite some time, up by 2.2%.
It appears the uptick across multiple sectors isn’t just the usual seasonal noise. For Sterling, this level of follow-through—after days of sideways movement—suggests we may now be seeing more regular buying on dips. Price action reflects that: holding above 1.30 at week’s close for the first time since October is not to be brushed aside. There’s structure building here, even as other major currencies have, in recent sessions, outpaced it a touch.
Trends And Trading Strategies
Support is forming a base—1.2975 and 1.3000 are acting as the levels where short-term selling dries up. If price revisits those zones and buyers keep stepping in, we could view it as a signal that a new higher range is being established. Resistance at 1.32 is the clear next hurdle, and above there, 1.34 starts to come into sight.
From our seat, what matters now is how markets respond not just to UK prints, but to global risk profiles and shifting central bank commentary. We’re not reacting to a single morning of good data; we’re weighing up whether forward momentum gets preserved. Prices above 1.30 reflect not only economic resilience but reduced expectations of immediate rate cuts. While others may have priced in more aggressive monetary easing, the UK has reasons to pause, and we see that being reflected in Sterling pricing.
What derivative traders might want to pay attention to are implied vols now that this level has been reclaimed. Long gamma strategies near support, or tight-range option plays approaching that 1.32 mark, begin to look more attractive if current momentum doesn’t fade quickly. Keep an ear out for rate differentials being repriced in upcoming sessions. These GDP numbers aren’t the only story, but they do impact forward rates and hedging costs directly.
To that end, any upside follow-through in GBP doesn’t require a massive re-rating, but rather a continued lack of overt weakness. We plan to monitor how the pair reacts to secondary data and external shocks. Short-term movements around 1.30 remain key—on either side of it, liquidity shows its hand.
