FX Report: 17th - 20th March 2025
Buy Side Target
1.3200
Sell Side Target
1.2720
Current Price
1.2930
GBP/USD is showing bullishness over the last few weeks, with value being established at key levels such as 1.2700 and 1.2900. We are currently in a phase of value creation to decide the next leg, up to 1.3200 or down to 1.2700. We can expect ranging and indecision in the market, following from the current uncertainty led by the US economic state with the election of Trump as their 47th president. It is normal to expect volatility as well as no clear direction due to multiple new policy changes expected in the near future for the US economy.
Bullish scenario:
If GBPUSD shows acceptance of price above the regions of 1.2950, we can expect price to push another 200 pips to reach our targets of 1.3200 and 1.3300 respectively.
Bearish scenario:
We need to see decisive action from sellers to suggest price is too expensive to continue to our targets of 1.3200 and 1.3300, if price drops we can safely look to target 1.2720 and 1.2650 for sells respectively. This would be another decisive point to understand what is next for the pair.
1. Economic Indicators:
- GDP Growth: The performance of the UK economy, particularly GDP growth rates, can significantly influence the strength of the GBP. A strong GDP report could bolster the pound.
- PMI Data: The Manufacturing and Services PMIs are crucial indicators. Strong readings can indicate economic expansion, positively impacting the GBP.
- Employment Figures: Employment data, including unemployment rates and job creation numbers, will also play a role in shaping market sentiment.
2. US Economic Data:
- Consumer Price Index (CPI): Recent reports indicated that the US CPI narrowed more than expected, which could lead to a weaker USD if inflation concerns ease.
- Federal Reserve Policies: Any hints or announcements regarding interest rate changes from the Federal Reserve can create volatility in the USD.
3. Political Factors:
- US Political Climate: Ongoing issues such as Trump tariffs, immigration policies, and the debt ceiling can create uncertainty, affecting the USD's strength.
- UK Political Stability: Any developments in UK politics, including government policies or Brexit-related news, can influence the GBP.
4. Market Sentiment:
- Investor Confidence: Overall market sentiment and risk appetite can lead to fluctuations in both currencies. A risk-off sentiment may strengthen the USD, while a risk-on environment could favour the GBP.
Last FX Report: 10th - 13th March 2025
Buy Side Target
1.3300
Sell Side Target
1.2450
Current Price
1.2930
Market Outcome
Neutral
Last week we spoke about price remaining at a key inflection point. Traders should watch for confirmation of either a breakout to the upside or a rejection that could trigger a deeper pullback. As always, staying adaptive to price action and key levels will be crucial in navigating potential market moves.
The market continued to consolidate and not provide any signs of change in value for the pair. Our traders having identified the market phase took advantage of both Long and Short opportunities which were presented, understanding these are the least risky trades given the current market context.
*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:
