FX Report: 24th - 27th February 2025
Buy Side Target
1.2750
Sell Side Target
1.2200
Current Price
1.2647
This week, GBP/USD has sustained its bullish momentum, holding firm above 1.26000, reinforcing the likelihood of an imminent push toward the 1.27500 region. With price action still imbalanced, we anticipate continued upside movement, provided bullish momentum remains intact.
Looking ahead, as long as buyers maintain control, a test of 1.27500 is highly probable. A confirmed break above this level would open the path toward 1.28350, presenting the next significant upside target.
However, if price fails to hold above 1.26000 and sustains below this level, we could see a shift in momentum, with 1.24500 coming into play as a key downside target. A break below this support would signal increased selling pressure.
Despite the potential for short-term pullbacks, we remain focused on buy opportunities in line with the prevailing bullish structure. As always, adapting to price action and key levels will be crucial in navigating the market effectively.
US Economic Indicators
- Personal Consumption Expenditures (PCE) Price Index: Scheduled for release on Friday, this is the Federal Reserve's preferred inflation measure. An unexpected rise could bolster the U.S. dollar as it may prompt considerations for tighter monetary policy.
- Gross Domestic Product (GDP) Revisions: Updates to the fourth-quarter GDP figures will provide insights into the U.S. economy's performance, potentially influencing investor sentiment and currency valuations.
Federal Reserve Communications:
- Speeches from several Federal Reserve presidents are anticipated this week. Their remarks could offer clues about future monetary policy directions, impacting the USD's strength.
UK Political Developments:
- Labour Party leader Keir Starmer's upcoming meeting with U.S. President Donald Trump will focus on the UK-U.S. relationship and the situation in Ukraine. While defence spending plans are not expected to be unveiled this week, any unexpected announcements could influence market perceptions of the UK's economic outlook
Potential Scenarios for GBP/USD:
- Bullish Scenario: If U.S. economic data disappoints or Federal Reserve officials signal a dovish stance, the USD may weaken, allowing GBP/USD to climb toward the 1.27650 resistance level. A sustained break above this level could target 1.29950.
- Bearish Scenario: Conversely, stronger-than-expected U.S. economic indicators or hawkish Fed communications could strengthen the USD, leading GBP/USD to test support levels around 1.22000 and then 1.20000.
Last FX Report: 17th - 20th February 2025
Buy Side Target
1.2750
Sell Side Target
1.2200
Current Price
1.2647
Market Outcome
Bullish
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 areas of support (1.25650). These levels serve as key indicators of where price may pivot from.
If these support zones are decisively broken, we can expect a downwards spiral towards the 1.24500 region, potentially acting as a short-term pullback. However, failure to sustain below these levels could lead to a continuation in bullishness and the potential for 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 for GBPUSD, we capitalised on any buying 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:
