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GBP.USD longs from 1.33800My focus on GU this week is to look for buy opportunities in line with the bullish trend. Price has left behind a clean 8hr demand zone that caused a break of structure to the upside, and I’ll be waiting for a retracement into that area. Once price taps into this demand zone, I’ll look for long setups to target further upside. Confluences for Buys: • Price approaching a clean 8hr demand zone • POI sits within the ideal Fibonacci dealing range • Break of structure to the upside confirms bullish bias • Liquidity resting above that price may look to take P.S. If price continues higher without retracing into my zone, I’ll wait for another bullish break of structure and then identify a new POI to trade from.
Long
by Hassan_fx
Fundamental Market Analysis for December 31, 2025 GBPUSDGBP/USD is trading near 1.34600–1.34700 ahead of the New Year after a quiet session. Sterling remains relatively resilient, but the market is heading into January with increased caution: low liquidity amplifies the impact of headlines and can cause sharper moves even in the absence of major data releases. In the UK, investors continue to reassess the rate outlook after the Bank of England’s December cut to 3.75% (with a close voting split) and guidance suggesting further easing may be gradual as inflation slows. Cooling signals from the labour market also weigh on the pound, as they can reduce sterling’s relative advantage. In the US, the dollar finds support because the Fed minutes reflected significant disagreement after the cut to 3.50–3.75% and hinted at a smaller number of moves in 2026. If expectations for US easing are revised toward a more limited scale, GBP/USD may shift into a corrective phase from current levels. Trading recommendation: SELL 1.34600, SL 1.34900, TP 1.33700
Short
by Fresh-Forexcast2004
Fundamental Market Analysis for December 22, 2025 GBPUSDGBP/USD is trading near 1.34000, and the pair remains sensitive to interest-rate expectations and fresh macro data from the UK and the US. During a shortened week, investors are reducing risk, closely watching US releases on growth and consumer sentiment, which can reshape expectations for the Fed’s next steps. The fundamental backdrop for the pound is complicated by the fact that the Bank of England cut the policy rate to 3.75% at its latest meeting, with a very close vote, and signaled that future decisions will be taken “meeting by meeting.” The regulator aims to bring inflation back to target, but softer economic momentum and a cooling labor market fuel the debate about supporting demand. If upcoming UK growth readings confirm a slowdown, the market may price in a more accommodative rate path, lowering the pound’s appeal. At the same time, the US continues to show signals that rates could be held steady for several months, especially if inflation declines more slowly than expected. This combination increases the likelihood of a stronger dollar and pressure on GBP/USD. Trading recommendation: SELL 1.33950, SL 1.34250, TP 1.33050
Short
by Fresh-Forexcast2004
Fundamental Market Analysis for December 12, 2025 GBPUSDOn December 12, the pound is trading around 1.33900, keeping part of the gains after the Fed decision, but upside is limited by expectations ahead of next week’s Bank of England meeting. The market is increasingly pricing in easier monetary conditions in the UK amid weak economic momentum and gradually slowing inflation, so demand for sterling remains restrained. For the dollar, the backdrop is still unfavorable: after the Fed’s move, investors are especially focused on labor and inflation data to assess how quickly the US could transition to lower rates in 2026. If releases continue to point to a cooling economy, the dollar may stay under pressure; however, signs of resilience could bring buyers back to the US currency. Today, attention will be on UK and US data that can adjust expectations for central bank decisions. If UK figures come in weaker than expected, the risk of heavier sterling selling increases, and the pair may move lower even with only a moderately weak dollar. Trading recommendation: SELL 1.33950, SL 1.34200, TP 1.33200
Short
by Fresh-Forexcast2004
Fundamental Market Analysis for December 9, 2025 GBPUSDSterling holds around 1.33300 amid anticipation of the Fed outcome and the upcoming Bank of England meeting. A U.S. rate cut is largely priced and narrows the yield differential that has supported the dollar. Services-sector inflation and wages in the UK are slowing but remain above pre-crisis averages, keeping the BoE from rapid easing and supporting real returns on pound-denominated assets. Fiscal steps aimed at shoring up household real incomes, together with normalized energy prices, improve the UK’s terms of trade and reduce vulnerability to imported inflation. Against this backdrop, resilient consumer spending and firmer business confidence lower the odds of a sharp deterioration in macro data, which is supportive for the pound as the dollar softens. Markets allow for gradual UK policy easing later on, but in the near term the balance of factors favors a moderate rise in GBPUSD on the back of the December Fed move and stabilizing U.S. yields. Upside potential toward 1.34750 looks reasonable with risk managed below 1.32750. Trade recommendation: BUY 1.33250, SL 1.32750, TP 1.34750
Long
by Fresh-Forexcast2004
Fundamental Market Analysis for December 4, 2025 GBPUSDEvent to watch today: 15:30 EET. USD - Unemployment Claims GBPUSD: Sterling holds near five-week highs versus the dollar thanks to contrasting rate expectations: markets see an earlier Fed cut, while the Bank of England proceeds more cautiously given sticky services inflation and wages. Improved macro assessments for the UK and firmer global risk appetite support the pound and encourage demand for GBP-denominated assets. At the same time, the dollar remains under pressure from softer U.S. indicators, redirecting flows toward higher-yielding G10 currencies. U.S. yields have stabilized without clear upside, reducing the dollar’s appeal as a defensive asset. If this configuration persists, the pound has room for a gradual advance against the dollar. Risks relate to potential upside surprises in U.S. data or remarks from policymakers; however, for now the fundamental picture remains moderately constructive for GBP. Trading recommendation: BUY 1.33500, SL 1.33150, TP 1.34550
Long
by Fresh-Forexcast2004
Fundamental Market Analysis for December 1, 2025 GBPUSDEvent to watch today: 01.12 17:00 EET. USD - ISM Manufacturing PMI GBPUSD: Sterling holds above 1.32 amid a softer dollar and a neutral-to-supportive UK backdrop: the impact of the Autumn budget and the OBR’s assessments is largely priced, while the Bank of England appears less inclined to ease early than the Fed. That divergence in policy expectations works against the dollar and underpins demand for GBP. Additional support comes from moderately positive signals in UK labor and consumer activity, alongside steady gilt yields. A measured risk appetite and the dollar’s softness after benign U.S. data strengthen the short-term momentum in favor of the pound. Risks relate to potential surprises in U.S. and UK statistics and any shifts in central-bank messaging. Nevertheless, the present configuration of fundamental factors is favorable for further GBP gains if the external backdrop remains neutral. Trade recommendation: BUY 1.32300, SL 1.32000, TP 1.33200
Long
by Fresh-Forexcast2004
Fundamental Market Analysis for November 21, 2025 GBPUSDThe pound remains under pressure after weak inflation data in the UK: headline CPI fell to 3.6% y/y and core to 3.4%, which has strengthened expectations of a Bank of England rate cut as early as December. Against this backdrop, the dollar retains the upper hand and the US dollar index is holding around 100. The combination of soft price dynamics and a cautious central bank shifts the balance of risks against GBP, limiting investors’ interest in the pound. There are signs of a cooling labour market: unemployment at 5% and wage growth at 4.2% y/y. Fiscal policy remains a key driver: markets are awaiting the Autumn Budget Statement on 26 November, assessing the room for stimulus and potential borrowing plans. Earlier Treasury data pointed to moderate borrowing volumes, but weak growth dynamics constrain room for manoeuvre. At the same time, demand and labour market conditions in the US remain resilient, supporting the dollar and keeping GBP/USD near the lower end of its recent range. The market is looking for clearer guidance from the Treasury and the Bank of England on the policy path and timing. Base case: with inflation easing and employment cooling, it is easier for the Bank of England to start a rate-cutting cycle than to tighten conditions further. This narrows the attractiveness of the pound relative to the dollar, which is supported by higher yields and robust US data. The scenario is to sell from 1.31000 with risk control. A turning point is possible if UK data surprise to the upside or the budget contains strong measures to support demand and productivity. Additional focus should be on Bank of England commentary. Trade recommendation: SELL 1.31000, SL 1.31500, TP 1.30000
Short
by Fresh-Forexcast2004
Fundamental Market Analysis for November 18, 2025 GBPUSDThe GBPUSD pair is holding near 1.31500–1.31600, as the dollar is supported by cautious market sentiment ahead of upcoming US data and by revised expectations for a Fed rate cut. Any strong figures on employment or inflation in the US strengthen the case for keeping rates high for longer and limit the upside potential for the pound. On the UK side, pressure comes from weak growth and signs of a cooling labor market. Recent GDP figures confirmed only modest expansion, while labor market reports indicate slower job creation, which increases the likelihood of a Bank of England rate cut next year. Additional pressure on the pound comes from the high sensitivity of households and businesses to borrowing costs and from uncertainty around fiscal policy. Against the backdrop of a strong dollar and growing expectations of a softer stance from the Bank of England, fundamental factors tilt the balance in favor of further GBPUSD downside, which supports short positions from around 1.31550 with a target near 1.30550. Trading recommendation: SELL 1.31550, SL 1.32050, TP 1.30550
Short
by Fresh-Forexcast2004
Fundamental Market Analysis for November 14, 2025 GBPUSDThe pound remains pressured by a mix of domestic and external factors. Fresh U.K. releases point to slower economic activity and keep alive the discussion about whether the Bank of England should ease policy late this year or in early next year. This backdrop limits capital inflows into sterling assets and heightens GBP’s sensitivity to swings in global risk appetite. Fiscal headlines and budget expectations add another layer of uncertainty. Talk of adjusting tax-and-spend plans makes investors more cautious, while elevated government borrowing costs lift the economy’s financing burden. Against this backdrop, markets prefer defensive positioning, which caps the pound’s upside versus the dollar. External drivers look neutral-to-negative for GBP: episodes of dollar softness are intermittent, and overall market volatility plus the pound’s dependence on U.S. yields make it hard for GBP/USD to mount a durable rally. Until clearer signals emerge on the inflation path and BoE decisions, the risk of renewed GBP/USD declines stays elevated. Trading recommendation: SELL 1.31500, SL 1.32050, TP 1.30650.
Short
by Fresh-Forexcast2004
Fundamental Market Analysis for November 11, 2025 GPBUSDEvent to watch today: 09:00 EET. GBP - Unemployment Rate GBPUSD: Sterling trades around 1.31600–1.31700 after early-week losses: progress on resolving the U.S. budget issue supports the dollar while narrowing the scope for a GBP rebound. Additional pressure comes from domestic U.K. discussions about the need for fiscal consolidation and prospects for new tax measures, which heighten investor caution toward growth. Against this backdrop, the pair retains a downside bias from 1.31650. From a monetary perspective, the U.K. still faces the likelihood of further policy easing in 2026 amid cooling activity and softer price pressures. This tempers the pound’s appeal versus the dollar, which in the near term benefits from clarity on budget risks and a potential increase in Treasury supply without the threat of a technical default. The market is unlikely to quickly overturn its cautious stance: the combination of fiscal restraint in Britain and normalization in the U.S. fundamentally favors USD strength against GBP. Absent fresh positive surprises from the U.K., the base case is a gradual move toward the 1.31 area and lower. Trading recommendation: SELL 1.31650, SL 1.32150, TP 1.30950
Short
by Fresh-Forexcast2004
GBP.USD Breakdown for the 2nd week of NovGU Weekly Outlook My analysis this week for GU is focused on where this current bullish move could take us next. - Scenario (A): If price retraces back to the 12hr demand zone, I’ll be looking for potential bullish reactions from that POI — ideally waiting for a Wyckoff accumulation to form before taking any buys. - Scenario (B): If price continues pushing higher, I’ll watch how it reacts at the nearby supply zone. A rejection there could trigger a short-term pullback back towards demand, giving us another chance to buy from a better position. Either way, we’ll see which POI gets tapped first and adapt from there. Let’s have a great trading week and catch those pips! 💪📈
by Hassan_fx
2
Fundamental Market Analysis for November 6, 2025 GBPUSDEvent to watch today: 14:00 EET. GBP - Bank of England Interest Rate Decision GBPUSD: Sterling remains near multi-month lows as markets weigh the UK’s tight fiscal crossroads and the risk of higher tax burdens in the November Budget. Expectations for a more cautious policy path from the Bank of England—after a sequence of rate reductions in 2025—combine with softening domestic leading indicators, reducing the premium for holding sterling-denominated assets. As a result, demand for dollar safe-haven instruments outpaces interest in the pound. A cloudy fiscal horizon—debate around the deficit and parameters of future consolidation—and softer UK price dynamics through the autumn limit room for GBP strength. At the same time, the external backdrop of a firm US dollar, volatile US Treasury yields, and generally wary global risk appetite weighs on the pound, as investors curb positioning ahead of BoE decisions and key incoming data. Overall, the fundamental balance of risks for sterling is skewed toward weakness: the dollar enjoys more support (including comparatively resilient US growth), whereas the UK narrative is loaded with uncertainty from budget to inflation. This preserves the probability of GBP/USD probing lower levels as caution dominates and in the absence of positive surprises from London. Trading recommendation: SELL 1.30650, SL 1.31150, TP 1.30000
Short
by Fresh-Forexcast2004
Fundamental Market Analysis for November 3, 2025 GBPUSDEvent to watch today: 17:00 EET. USD - ISM Manufacturing PMI GBPUSD: The pound remains under pressure due to softer domestic macro indicators and rising expectations of policy easing by the Bank of England. Markets discuss the possibility of a rate cut as early as November amid slowing inflation and signs of a cooling labor market. Even if the decision is delayed, the policy tone aimed at supporting the economy increases the bias toward a weaker currency. Fiscal considerations add uncertainty: expectations of a tighter budget later this month narrow the space for consumer activity and investment. As a result, the risk premium on UK assets rises and investors favor dollar instruments, pulling the pair lower. The US retains a yield advantage and receives support from the flow of data on employment and business activity. A stronger dollar, together with locally softer BoE expectations, forms a fundamental downward bias for GBPUSD in the near term. Trading recommendation: SELL 1.31350, SL 1.31850, TP 1.30500
Short
by Fresh-Forexcast2004
GBP/USD Long from current price.GU Weekly Outlook After a steady bearish run last week, GU has now entered a strong discounted demand zone that previously caused a break of structure to the upside. Price has already shown signs of Wyckoff accumulation and is now pushing toward the nearest supply zones. I’ve marked two potential supply areas close by, but I suspect the first (8hr) supply may be violated as the premium one above looks stronger. My plan is to look for short-term buys up to that supply, then prepare for potential sell setups to continue the overall bearish trend. Confluences: - GU has been bearish, breaking structure to the downside - Two nearby supply zones above current price - Price currently in a strong demand zone, likely to cause a short-term correction - Liquidity resting below waiting to be taken - DXY showing bullish movement, aligning with this outlook P.S. I wouldn’t be surprised if GU rallies from this demand zone toward the premium level around 1.32000 before continuing its downward move.
by Hassan_fx
Fundamental Market Analysis for October 24, 2025 GBPUSDSterling is under pressure after softer-than-expected UK inflation. The easing in price pressures has increased the likelihood of Bank of England policy loosening over the coming meetings, narrowing the yield differential in favor of the dollar. While rate expectations are partly in the price, UK releases still point to cooling household demand. The U.S. inflation print is a potential short-term market driver. Given the high sensitivity to real rates, even a neutral U.S. report can keep the dollar supported. If actual price dynamics exceed consensus, demand for funding and risk assets may be capped, reinforcing pressure on the pound. The UK policy and economic backdrop remains mixed: budget priorities and household spending face a slowing economy, while the external environment for exports is soft. Altogether this argues for a cautious view on sterling and supports a sell-on-rallies approach in the near term. Trading recommendation: SELL 1.33250, SL 1.33750, TP 1.32250
Short
by Fresh-Forexcast2004
GBP sinks as “Santa cut” possibility grow Sterling is under pressure after the UK’s September inflation data came in softer than expected. Annual inflation held steady at 3.8%, below forecasts of 4%, strengthening expectations that the Bank of England could deliver a “Santa cut” in December. Markets are now pricing a 72% chance of a rate reduction before year-end. The weaker inflation print triggered a classic market reaction, with GBP/USD falling below its 200-hour moving average, its lowest level in a week, as sellers gain control and shift sentiment to a more neutral-to-bearish bias. Immediate support potentially lies near 1.33055, followed by the key level at 1.32484. Sterling bulls, meanwhile, might have trouble justifying an attempt at the daily moving average that capped the pairs late October rally.
by BlackBull Markets
Weekly Outlook for GBP/USD (20–24 October 2025)Overview GBP/USD enters the week of 20–24 October 2025 trading around the mid-1.34 level, having rebounded from recent lows near 1.33. The pound’s modest recovery has been underpinned by a softer U.S. dollar (amid expectations of Federal Reserve rate cuts) even as the UK faces domestic economic headwinds. This week brings a packed calendar of market-moving events: critically, the UK’s inflation report and consumer data, a delayed U.S. CPI release, and flash PMI surveys across major economies. Meanwhile, fiscal and political developments – from Britain’s looming budget to U.S.–China trade tensions – add further context. Retail FX traders should brace for potential volatility as these drivers converge on the GBP/USD pair. Key Themes: The UK’s inflation trajectory is in focus on Wednesday, which could reshape Bank of England (BoE) expectations, while U.S. policy clarity is clouded by a recent government shutdown that delayed data releases. Both factors, alongside global risk sentiment, will determine whether GBP/USD can sustain its footing above $1.34 or if it retraces toward recent lows. United Kingdom – Inflation in Focus Amid Domestic Pressures UK Inflation: Critical CPI Data (Wed 22 Oct) Britain’s Consumer Price Index (CPI) for September is due on Wednesday, 22 October, and is the marquee event for sterling. After holding at 3.8% in August – the highest inflation among major advanced economies – markets expect an uptick towards ~4.0% year-on-year. The Bank of England itself has forecast headline inflation could reach ~5.5% by Christmas before easing. A hotter-than-expected CPI print this week “could offer GBP some relief” by bolstering bets that the BoE might need to maintain or even extend its tightening stance. In particular, traders will scrutinise the core inflation and services CPI components for any signs of sticky price pressures. Conversely, a softer CPI reading – especially if accompanied by a drop in core or services inflation – would “deepen downside” for the pound. A weak print would reinforce the view that UK inflation is finally on a clear downtrend, cementing dovish BoE expectations and potentially undercutting GBP. Several factors are influencing the UK’s inflation outlook. Energy costs are a major wildcard: oil prices have actually fallen to multi-month lows (Brent crude ~$61, the weakest since May) on oversupply concerns. Cheaper oil and petrol should help temper near-term inflation for the UK, which is a net energy importer. Additionally, the British government is actively considering measures to reduce household energy bills – notably a plan to scrap the 5% VAT on domestic fuel in the upcoming budget. The Chancellor, Rachel Reeves, has confirmed she is examining a cut of VAT on gas and electricity to 0%, aiming to ease cost-of-living pressures. Such a move, if enacted, could modestly dampen CPI (by directly lowering utility bills), but it comes at a fiscal cost of about £2.2 billion per year in lost revenue. This illustrates the policy dilemma: providing inflation relief versus safeguarding public finances. Markets will be alert this week to any official hints on this VAT cut, as it might alter the medium-term inflation path (a VAT removal would likely knock a few tenths of a percent off headline CPI in the short run) and thus influence BoE policy calculus. Consumer Spending & Retail Data (Fri 24 Oct) Beyond inflation, the pulse of the UK consumer is another focal point. Retail Sales for September are scheduled for Friday, 24 October (7:00am UK time). Recent signals suggest a mixed picture. On one hand, official retail volumes have shown pockets of resilience – August sales rose 0.5% MoM, outperforming expectations. On the other, surveys indicate underlying weakness: the Confederation of British Industry (CBI) reported retail activity has declined year-on-year for “a 12th straight month” in September. The CBI survey balance was -29 in Sept (from -32 in Aug), and retailers foresee another drop in October (expectations balance plunging to -36) amid weak consumer demand. Retailers note that “lacklustre economic conditions” and even US import tariffs (part of renewed trade tensions) are hurting sales. Moreover, consumer confidence has wavered heading into the autumn – households are grappling with higher borrowing costs and uncertainties about fiscal policy. If Friday’s official data confirm a significant slowdown in September retail spending, it would underscore the drag on the UK economy from the cost-of-living squeeze. However, any surprise uptick (as happened in August) could imply British consumers are coping slightly better than feared, which might lend the pound support. Context: UK shoppers face cross-currents – falling inflation in some areas (e.g. food inflation has eased from double digits, though still ~5%reuters.com) versus rising outgoings like energy bills (the winter price cap increased) and high mortgage rates. This week’s data will help “connect the dots” on whether the UK’s economic momentum is holding up or rolling over as we approach Q4. Labour Market & Wages – Cooling, but Watch for Policy Impact While no major jobs data is due this week, the UK labour market backdrop looms over the BoE’s decision-making. Last week’s ONS report showed the unemployment rate has crept up to 4.8% (in the June–August period), the highest since 2021. Crucially, wage growth is slowing: regular pay rose 4.7% YoY, the slowest since 2022. This cooling of pay pressures is a welcome sign for the BoE’s inflation fight. As one analyst noted, the combination of easing wage growth and a rising jobless rate gives the data a “dovish tint” for the BoE. Indeed, markets have slightly pulled forward their expectations of the first BoE rate cut into early 2026 (though no cut is expected in 2025). If inflation numbers this week undershoot or if any BoE speakers emphasise the labour market’s softening, rate-cut speculation could grow, potentially weighing on GBP. Conversely, a CPI upside surprise might re-focus attention on still-elevated wage levels (4.7% pay growth is above the BoE’s inflation target) and keep rate cuts on the backburner. Traders should note that BoE Governor Andrew Bailey recently flagged concerns about financial stability – citing some corporate failures as possible “canaries in the coal mine” for broader risks – but he did not suggest this was altering the immediate monetary policy stance. Overall, the BoE appears in “wait and see” mode: inflation data will be key in either reinforcing that peak rates have passed or, if unexpectedly high, reviving talk of one last hike. Fiscal Policy and Politics – Budget Looming, Borrowing High The UK’s fiscal picture has taken on greater significance for FX markets as government borrowing swells. Data out on Tuesday showed Britain’s public sector net borrowing from April–September reached £99.8 billion, 13% higher than a year prior and the second-highest on record for that period (only topped by the 2020 pandemic year). In September alone, the government borrowed £20.2 billion, a five-year high for that month. This overshoot in borrowing (about £7.2bn above official forecasts so far this year) keeps the pressure on Chancellor Rachel Reeves ahead of the 26 November Autumn Budget. She has already signalled that tax rises and spending cuts are on the table to plug the gap and meet fiscal rules. Indeed, Reeves aims to balance day-to-day spending by decade’s end, but with her “fiscal headroom all but exhausted” due to weaker growth and higher interest costs, tough choices lie ahead. From a currency perspective, tighter fiscal policy (higher taxes, restrained spending) could dampen UK growth prospects, which is typically a negative for sterling. As ING economists cautioned, “tighter fiscal and looser monetary policy should ultimately be a bit bearish for sterling”. However, a credible budget that reins in borrowing might also appease bond markets and prevent any flare-up in UK risk premium. Investors vividly remember the gilt turmoil of 2022, so there is focus on Reeves avoiding any loss of market confidence. For now, the pound has taken the borrowing news in stride – sterling was “little changed” after the latest debt figures – suggesting that as long as fiscal slippage remains modest, it is not a primary driver for GBP/USD. Still, traders will monitor any weekend headlines or leaks on budget measures (such as the mooted energy VAT cut or other tax changes) as we inch closer to November. Surprise announcements could cause intraday shocks to the pound, especially if they imply significantly more borrowing or, conversely, austerity that could hit growth. United States – Data Vacuum and Fed Policy Uncertainty U.S. Economic Data: CPI and the Shutdown Effect Over in the U.S., the economic calendar has been disrupted by the federal government shutdown that began on 1 October and lasted most of the first three weeks of this month. This led to a “data vacuum” where key releases like the September jobs report were postponed, leaving Fed officials and markets “flying blind” to some extent. Fortunately, one crucial indicator – the September Consumer Price Index – will be published this week on Friday, 24 October. (The U.S. administration ensured the CPI release goes ahead, partly because it’s needed to calculate Social Security COLA adjustments.) Consensus expectations see U.S. headline CPI at around +3.1% YoY for September, which would be an uptick from August and above the Fed’s 2% goal. Any upside surprise (e.g. an even higher inflation number or stronger core CPI) could give the dollar a fillip – it would “keep alive policymakers’ concerns about the wisdom of cutting rates any further” at upcoming Fed meetings. In contrast, a cooler-than-expected CPI (say, below 3%) might reinforce the dovish case and deepen the market’s conviction in Fed rate cuts, weighing on the dollar. Notably, the Fed’s preferred inflation gauge, core PCE, has been running a bit lower (2.7% YoY as of August) but was on an upward drift into year-end. This CPI print is thus seen as pivotal for shaping the late-2025 inflation trend. Besides CPI, the U.S. will see flash PMI surveys on Friday (covering manufacturing and services), which will provide a timely check on business activity in October across major economies (US, Eurozone, UK). The U.S. PMIs have been hovering around the breakeven 50 mark in recent months – any significant weakness could amplify recession worries, while resilience might bolster the soft-landing narrative. Additionally, weekly jobless claims (Thursday) will be watched for any creep higher now that certain industries (and possibly government contractors hit by the shutdown) faced stress. However, overall, this week’s U.S. data flow is relatively light, and the absence of some regular reports (e.g. housing starts, trade data, which may have been delayed by the funding lapse) means the focus is squarely on CPI and broader themes rather than a barrage of numbers. Federal Reserve Outlook: Cuts on the Horizon? The Federal Reserve meets the following week (Oct 28–29), and despite limited fresh data, expectations are firmly tilted toward a rate cut. Financial markets are pricing in a 25 bp cut at that meeting (to a 3.75–4.00% Fed funds range) with near certainty. Fed officials themselves appear divided: some, like Kansas City Fed President Schmid, argue the current 4%+ rate is “the right place to be” to keep pressure on inflation while others – notably new Fed Governor Stephen Miran – contend that rates are far too high given inflation’s downtrend. The wildcard is the missing data: “The big question mark right now is the labour market, and we cannot know that until we see the report,” noted one economist, referring to the delayed September payrolls. The Fed is essentially going into the meeting with an incomplete picture, which raises the bar for aggressive policy moves. Yet, with job growth clearly slowing (only ~29k per month on average June–Aug, a dramatic comedown from the post-pandemic boom) and the fiscal drag from the shutdown, doves have a strong argument that some easing is prudent. Indeed, futures now price not just October’s cut but another in December, and Fed speakers like St. Louis Fed’s Musalem have voiced support for more easing if employment risks grow. For the dollar, a confirmed Fed rate cut (especially if coupled with dovish guidance) is typically a negative driver. This expectation has been part of why the USD Index (DXY) slipped under 99. However, the effect on GBP/USD will also depend on relative outlooks – if the BoE is perceived as even more dovish (with UK rate cuts looming sooner, or a bigger growth worry), the pound could still weaken on a relative basis. At present, Fed easing bets have taken some wind out of the dollar’s sails, aiding cable’s bounce. But any hawkish surprise from the Fed (e.g. if they signal no more cuts due to inflation worries) could swiftly reverse that. Keep an eye on Fed Chair Powell’s remarks – although they’ll come after this week, speculation around them may already start mid-week if CPI surprises. Also notable: the U.S. government is still operating only on stopgap funding, and political paralysis in Washington (House leadership issues, etc.) has not fully resolved. This has macro implications – the recent 19-day shutdown is estimated to shave ~0.3 percentage points off Q4 GDP – and contributes to an overhang of uncertainty that intermittently hits the dollar. Trade Tensions and Other U.S. News An emerging theme that could influence global sentiment (and by extension, safe-haven USD demand) is the renewal of U.S.–China trade tensions. In recent days, the world’s two largest economies have imposed tit-for-tat restrictions, including new port usage fees on each other’s shipping, effectively rekindling a trade war. This escalation has raised concerns about global supply chains and growth – the WTO warned a full decoupling could cut world output by 7% over time. For now, markets are warily watching diplomatic developments: there are talks scheduled (U.S. Treasury officials meeting Chinese counterparts) that could either ease or worsen the standoff. The tone from U.S. President Trump (back in office as of January 2025) has oscillated between hardline – e.g. pressuring allies like India to stop buying Russian oil – and occasional optimism, such as him softening rhetoric by expressing hope for Chinese purchases of U.S. goods. Any further headlines on trade this week may sway risk appetite: an easing of tensions could boost equities and risk-sensitive currencies (potentially helping GBP), whereas a sharp escalation could drive a flight-to-quality benefiting the dollar (and possibly hurting sterling). In addition, U.S. corporate news has injected some jitters – the recent bankruptcies of two U.S. companies (First Brands and Tricolor) led to loan losses at certain banks, rattling stock prices. While these are idiosyncratic events, the BoE’s Bailey and others are asking if they hint at broader credit stress. If U.S. financial sector concerns deepen, that too might spur safe-haven USD flows at the expense of currencies like GBP. So far, these seem contained, but it’s a space to watch. Global Risk Environment and External Influences Europe and PMIs This Friday’s round of flash PMI surveys will not only cover the US and UK, but also the Eurozone, offering a near-real-time health check of major economies in October. Europe’s data could indirectly affect GBP if it moves the euro (EUR/USD), given GBP often trades in tandem with the euro against the dollar. Recent trends show the Eurozone had somewhat better momentum in early autumn while the UK was stagnating – September PMI for UK services slipped to ~50, and manufacturing was deep in contraction at 46.2. Should the Eurozone PMIs surprise positively while the UK’s disappoint, GBP could face a double whammy (as EUR/GBP strength might emerge). Conversely, if Europe’s economy also looks sluggish, it might limit GBP’s downside. The global backdrop as indicated by PMIs is expected to be one of subdued manufacturing and moderating services activity, reflecting the lagged impact of rate hikes worldwide. Geopolitical Tensions Geopolitics remain a simmering factor. The war in Ukraine and recent conflict in the Middle East (Israel-Hamas) continue to pose event risk. A major flare-up or expansion of conflict could spark risk-off moves – typically benefitting the U.S. dollar and other safe havens (and possibly weakening GBP, given the pound’s status as a risk-sensitive currency). Additionally, any shock OPEC+ action or supply disruption due to geopolitical events could whipsaw oil prices, which, while currently low, are one headline away from a spike. For now, absent new shocks, oil’s trajectory has been downward on oversupply: Brent’s forward curve even shifted into contango (a sign of glut) for the first time in a long while. Cheaper oil is a small positive for the UK’s inflation outlook and trade balance. Market Sentiment and Equities Global equity markets’ performance this week could also influence GBP/USD via the risk sentiment channel. If stocks rally on, say, hopes of Fed easing and cooling inflation, the dollar could weaken modestly as investors seek higher yields outside the U.S., which might support GBP. Indeed, the pound has held up relatively well against the dollar compared to some other currencies, partly thanks to periodic “risk-on” flows into UK assets when global markets rally. On the other hand, any sharp equity sell-off – whether triggered by earnings misses, credit concerns, or geopolitics – might revive demand for the safe-haven dollar, pressuring GBP/USD lower. It’s worth noting that U.S. Treasury yields (especially long-term) have been a driver lately; a pullback in yields (as markets bet on Fed cuts) hurt the dollar, but yields remain historically high. Should yields rebound this week (for example, if CPI is hot), the dollar may catch a bid and weigh on the pair. Keep an eye on the U.S. 10-year yield around the 5% threshold as a barometer. GBP/USD Technical Outlook From a technical perspective, GBP/USD is in a consolidation phase, trading within roughly a 1.32–1.36 range in recent weeks. The pair’s 50-day and 200-day moving averages are converging near the current price, reflecting the lack of a strong trend and an indecisive momentum backdrop. Support is evident around $1.33 – cable bounced off about $1.3250 last week, which was a multi-month low. Below that, the 1.3200 area and August’s trough near 1.3150 are potential downside targets if bearish momentum resurfaces. On the topside, initial resistance comes in at 1.3450, and a break above there would be a bullish sign, possibly opening a move toward 1.3515–1.3520 (a congestion zone from September). Beyond 1.3520, the next hurdle would be around 1.3600. Technical indicators are mixed: the RSI is near 50, and other oscillators are neutral, showing neither overbought nor oversold conditions. This suggests GBP/USD could await a catalyst (such as the CPI releases) to break out of its current equilibrium. Traders may thus see range-bound trading persist in the early part of the week, with volatility likely picking up mid-week onward. Notably, option implied volatilities have edged higher ahead of the UK CPI event, indicating the market is positioning for larger moves. In summary, 1.3380–1.3400 (roughly the 50-day EMA region) is a pivot area to watch; sustained trade below it could tilt bias lower, whereas holding above keeps the recent rebound intact. (Chartists’ take: As of now, the pound’s failure last week to vault the mid-1.34s suggests lingering selling interest on rallies. But equally, dip-buyers emerged around 1.33. This tug-of-war may continue unless a data surprise tips the scales.) Summary and Trading Considerations In the week ahead, GBP/USD will be driven by a balance of domestic UK catalysts and U.S. developments, within a broader global mood of cautious optimism tempered by risk flare-ups. The pound’s bullish case would be bolstered if UK inflation surprises to the upside or other data (e.g. retail sales, PMIs) show unexpected resilience – that scenario could delay BoE easing and push GBP/USD higher, especially if U.S. CPI comes in tame (denting the dollar). In such a case, a test of the mid-1.35s could be on the table. Conversely, the bearish case for GBP/USD is that UK data disappoint (soft inflation, weak retail activity) and the Fed remains on track to ease – meaning the pound’s own fundamentals deteriorate while the dollar might find safe-haven or yield support. Add in any risk-off events (e.g. worsening trade war or geopolitical shock), and cable could retest recent lows around 1.33 or lower. At present, the bias among many strategists is mildly bearish on GBP as domestic fundamentals (high inflation and soft growth) limit upside. As one analysis noted, “bearish bias persists — GBP continues to struggle under domestic pressures”. However, the dollar’s trajectory is equally crucial: if the Fed’s data-dependent stance turns more cautious with incoming numbers, the USD’s recent strength could wane, offering GBP/USD some relief. Connecting the Dots: It’s important for traders to contextualise each piece of news. For example, a hot UK CPI might spike GBP higher on Wednesday morning – but if later that day U.S. trade or political news triggers a risk-off, the dollar could rebound and erase those gains. Similarly, a benign U.S. CPI on Friday could send GBP/USD upward, but one must consider that by then markets will also be positioning for the Fed meeting outcome the week after. Risk management is key in such a headline-driven environment. Many will be watching volatility around the London session (for UK releases) and the New York session (for U.S. releases) for intraday opportunities. In conclusion, GBP/USD traders should monitor: (1) the UK CPI and retail figures for clues on the BoE’s next steps, (2) the U.S. CPI and any Fed speak for confirmation of the anticipated rate cut, (3) fiscal headlines from the UK (as budget plans firm up) and political developments in the US (post-shutdown manoeuvrings), and (4) the general risk tone influenced by global events like trade and geopolitical issues. All these elements are “contextually connected” – for instance, stronger UK data coupled with a dovish Fed could produce a synergy lifting GBP/USD, whereas weak UK data in a risk-off, dollar-favouring climate could see the pair test new lows. By keeping an eye on all these moving parts, one can better navigate the week’s challenges. Sources: Key insights and data points have been drawn from Reuters, UK's ONS, and other reputable outlets to ensure an up-to-date and analysis. For instance, Reuters reports provided details on the UK’s inflation outlook and fiscal situation, the cooling of Britain’s labour market, and the Fed’s predicament amid the U.S. data blackout. Developments in energy and trade (e.g. oil prices hitting 5-month lows, U.S.–China tariffs) were also referenced from Reuters coverage. These sources underpin the analysis, ensuring that each “dot” – from macroeconomic releases to political news – grounded in factual reporting as we connect them to map out the likely trajectory of GBP/USD this week.
by Mark_Vader_Labs
Fundamental Market Analysis for October 21, 2025 GBPUSDThe pound has retreated from last week’s highs as the market prepares for fresh UK price data and weighs it against recent Bank of England signals. After the August rate cut to 4.00%, policymakers emphasize that any further easing should be cautious given the risk of still-elevated inflation—higher than in most G7 peers. That tempers excessive optimism on sterling and makes the reaction to CPI potentially asymmetric: softer prices would support expectations of later cuts, while stickier readings would revive concern about persistent inflation. The US backdrop works against cable: the ongoing partial suspension of federal agency operations in the US boosts demand for the reserve currency during bouts of uncertainty, and high US real yields continue to attract global capital. Until markets receive a clean run of US data and clarity on the budget, the dollar’s near-term advantage remains. Domestic fundamentals also constrain sterling: households remain sensitive to borrowing costs, business investment is uneven, and the services surplus cannot fully offset external risks. As a result, scope for a swift sterling advance is limited, with the balance of risks favoring moderate profit-taking after the climb toward the 1.34 area. Trading recommendation: SELL 1.34050, SL 1.34550, TP 1.33550
Short
by Fresh-Forexcast2004
1
GBP/USD Outlook for 20–24 October 2025Bias: Range-to-lower while price is below 1.3400–1.3420. Bull trigger: Daily close > 1.3400/20 → corrective squeeze toward 1.3480–1.3500, maybe 1.3530–1.3550 if data/risk help. Bear trigger: H4 close < 1.3260 → continuation to 1.3180–1.3200, stretch 1.3120–1.3130. Why now: BoE signals the cutting cycle isn’t over but the pace may slow (limits tops, cushions dips). IMF “AI-froth” warnings + today’s AWS outage keep a risk-off asymmetry that tends to support USD on shocks. Assumptions: last known spot mid-1.33; UK times; no surprise policy moves/interventions. Confidence: moderate on ranges/levels; low-moderate on directional breakouts. Technical analysis (H1/H4 with D1 context) Trend & structure. Since the early-Oct selloff, cable has carved lower highs and tightened into a triangle/descending channel. Intraday MAs remain gently down/flat; rallies fade beneath the 1.336–1.340 pivot. Key levels Resistance: 1.3360–1.3400 (pivot/MA confluence) → 1.3480–1.3500 (first corrective target) → 1.3530–1.3550. Support: 1.3330–1.3300 → 1.3280–1.3260 (line-in-the-sand) → 1.3200–1.3180 → 1.3130–1.3120. Tape tells: Down-legs have shown heavier participation than up-legs (selling on strength). For breakouts, look for 30–60 min hold or a retest to validate. What would change the chart view quickly? Daily close >1.340 flips short-term structure to a corrective up-phase. H4 close <1.326 confirms triangle breakdown and trend resumption. Macroeconomic fundamentals (this week) BoE vs Fed. Your Megan Greene notes: slack rising; underlying growth weak; inflation risks two-sided but with upside concern; policy “not meaningfully restrictive”; cutting cycle not over but slower pace plausible. Net: near-term less dovish than feared (GBP-supportive on dips), medium-term still easing (caps sustained rallies). UK data (primary drivers): Wed 22 Oct — CPI (Sep, 07:00). A benign/core-soft print raises odds of a corrective GBP pop (easier path through 1.340). A hot/sticky print re-anchors inflation worry → GBP sold on rallies. Fri 24 Oct — Retail Sales (07:00) & Flash PMIs (AM). Weak consumption or sub-50 PMIs would lean GBP-negative into the weekend; solid beats could extend any mid-week squeeze. US/global side: IMF’s AI-valuation warnings keep risk-off optionality alive; Monday’s AWS outage showed how quickly “systemic tech” headlines can push a USD haven bid even if transient. If equities wobble, USD tends to firm; calm equities encourage corrective GBP strength. Structural (not a 1-week catalyst): Your “Sterling-20” thesis (domestic patient capital into UK productive assets) is medium-term GBP-supportive via productivity/potential-growth optics, but won’t decide this week’s path unless echoed in policy/newsflow. Market sentiment & positioning Sentiment: Fragile. Markets are headline-sensitive to tech/AI froth, outages, and macro prints. That creates two-way volatility with a slight USD-on-stress bias. Positioning: Specs are not at extremes in GBP (room to build either way). That means breaks can run once confirmed—less mechanical squeezing to stop them. Integrated forecast & scenarios (20–24 Oct) Base case – Range with bearish drift (≈40%) Rallies fade under 1.340 ahead of/after CPI unless the print is clearly benign. Day-to-day swings between 1.336–1.340 and 1.333–1.330; occasional tests of 1.328–1.326. Week closes mid-range or slightly lower. Relief squeeze – Corrective up-move (≈35%) CPI benign or softer and risk mood steadies → daily close >1.340. Follow-through to 1.348–1.350; first touch likely attracts supply. Additional beats (Retail/PMIs) open 1.353–1.355 before fatigue. Bear resumption – Trend extension (≈25%) CPI hot/sticky, weak Friday prints, or risk-off in equities/tech → H4 <1.326 triggers momentum to 1.318–1.320; overshoot to 1.313 on stress. Caveats: elevated event risk (CPI/PMIs), headline shocks (tech/cloud/infrastructure, geopolitics). Expect whipsaws around releases; spreads can widen. Practical Weekly Playbook (execution-ready) While <1.340: Sell-rally bias. Short 1.336–1.339, SL 1.342, TP 1.333 → 1.330 (scale out); reload only on fresh rejection. Counter-longs only on strong rejection at 1.326–1.328, SL 1.324, TP 1.333–1.336. Breakout long: Only on daily close >1.3405 → buy pullback 1.341–1.343, SL 1.336, TP 1.348, runner 1.353. Breakdown short: On H4 close <1.326 → SL 1.333, TP 1.320, runner 1.313 (trail above last H1 lower high). Hedging (if holding legacy longs): Small protective shorts 1.346–1.349 (SL 1.352) to smooth PnL; lift hedge on daily >1.350 or if CPI benign and price holds above 1.340. What to watch, day by day (UK time) Mon 20: Risk tone after AWS; guard the 1.336–1.340 gate. Tue 21: Pre-CPI positioning; keep sizes light; expect mean reversion. Wed 22: CPI 07:00. Trade the confirmation, not the knee-jerk. Thu 23: Digest day—does price hold above/below 1.340? Fri 24: Retail Sales & PMIs. Data decide whether squeeze extends (1.348–1.350) or the floor gives way (1.326 → 1.320). Bottom line This week still turns on the 1.340 gate and UK data. Under it, treat cable as range-to-lower and sell strength; above it (on a daily close), respect a corrective squeeze into 1.348–1.350. CPI/retail/PMIs choose the path; risk headlines (AI/tech/outage-type) set the pace.
by Mark_Vader_Labs