FX Report: 17th - 20th February 2025
Buy Side Target
1.27500
Sell Side Target
1.2200
Current Price
1.2585
This week, GBP/USD has maintained its bullish momentum, holding firm above 1.25500, reinforcing the likelihood of a continued push toward the 1.27500 region. While price action remains somewhat imbalanced, a temporary consolidation or retracement may occur before resuming its primary upward trajectory.
Looking ahead, sellers will need to establish firm control at 1.27500 for any significant downside movement. A strong rejection followed by sustained price action below this level could signal a shift in momentum. However, if price experiences only a minor pullback before breaking decisively above 1.27500, this would pave the way for an extended bullish rally, with 1.30000+ coming into play.
A confirmed breakout above 1.27500 would likely set the stage for further gains, bringing 1.33000 into focus as the next major resistance level. These key price zones will serve as pivotal markers in the days ahead, guiding market participants through potential opportunities.
As always, maintaining a disciplined approach and adapting to evolving price action will be essential in navigating this market structure effectively.
Last UK Inflation Data:
- January CPI: Inflation rose to 3.0%, exceeding the anticipated 2.8%.
- Implications: Persistent inflation may prompt the Bank of England (BoE) to reconsider its monetary policy stance, potentially delaying planned rate cuts.
Bank of England's Monetary Policy:
- Interest Rates: The BoE recently reduced its main interest rate to 4.50% due to sluggish economic growth.
- Inflation Concerns: The unexpected rise in inflation challenges the BoE's forecast of easing price pressures, possibly influencing future rate decisions.
US Economic Indicators:
- Retail Sales: A 0.9% decline in US retail sales has raised concerns about slowing consumer demand
- Trade Policies: Recent comments from President Trump regarding potential trade tariffs have introduced uncertainty, impacting the US dollar's strength.
Trading Implications for GBP/USD
- Bullish Scenario: If UK economic data continues to outperform and the BoE maintains or raises interest rates to combat inflation, the pound may strengthen against the dollar.
- Bearish Scenario: Conversely, if US economic conditions improve or the BoE signals further rate cuts due to growth concerns, the pound could weaken relative to the dollar.
Last FX Report: 10th - 13th February 2025
Buy Side Target
1.2750
Sell Side Target
1.2300
Current Price
1.2585
Market Outcome
Neutral
As outlined in last week’s analysis, GBP/USD has continued its upward movement, encountering reactions at the highlighted grey zones, which have acted as temporary consolidation areas. These levels serve as key liquidity points where price may pause before making its next move.
If these resistance zones are decisively broken, we can expect a continuation toward the 1.27500 region, reinforcing the broader bullish structure. However, failure to sustain above these levels could lead to a short-term pullback before further upside momentum resumes.
Monitoring price action at these key areas will be crucial in determining the next move, whether it be a breakout continuation or a temporary retracement.
Successful traders recognize the significance of these key levels and understand when to remain patient versus when to act. Discipline, adaptability, and strategic decision-making are what separate great traders from the rest.
For now, we stay vigilant, monitor price behaviour around these critical zones, and wait for the market to reveal its next move.
Identifying the bullish strength, as well as short-term consolidation, for GBPUSD, we capitalised on any buying and selling opportunities the market presented using our proprietary tools and strategy.
*Contracts for difference (CFDs) are complicated financial contracts based on leverage, which can possibly result in huge fluctuations in profits or losses. Therefore, it is essential to study and understand CFDs thoroughly before embarking on investment. You should at the same time stay conscious and ready yourself for the potential risk of losing a part or your whole capital. This outlook is non-financial advice, you should consult with your personal financial advisor before making any investment decisions.
How we traded this outlook:
