FX Report: 11th - 17th July 2025
Buy Side Target
1.3700
Sell Side Target
1.3350
Current Price
1.3500
We are just approaching our mid-term sell target of 1.3500 after seeing it reverse from our desired 1.3770 region on GBPUSD. The short-term sell opportunities have been clear this past week and allowed our traders to capitalise on downside risk while protecting their capital from any impulsive long exposures. Should 1.3500 and 1.3440 not hold, we can expect further sells into 1.3350 on the mid-term.
United Kingdom: Weak Growth, Fiscal Strain, BoE Risks
UK Economy Contracts Again: The UK economy shows a second consecutive monthly contraction, with GDP falling 0.1% in May after April’s 0.3% drop. This ongoing weakness in manufacturing and construction undermines confidence in the recovery and pressures the pound.
Chancellor Labels Data ‘Disappointing’: Chancellor Rachel Reeves calls the GDP numbers “disappointing” but promises to maintain wage rises and public investment. Markets worry that persistent weakness narrows her fiscal room and raises the risk of future tax increases or spending cuts.
Welfare Bill Vote Looms, Fiscal Flexibility in Focus: Investors watch Parliament closely ahead of a critical vote on the welfare reform bill. The government has already scaled back about £4 billion in proposed cuts to win votes, signaling tight fiscal flexibility that may drive gilt yields higher and weigh on sterling.
BoE Governor Hints at Rate Cuts: Bank of England Governor Andrew Bailey warns that further rate cuts are possible if the labor market softens further. This dovish message raises expectations for a cut as early as August or September, putting additional downside risk on GBP.
United States: Trade Tensions, Fed Expectations, Dollar Moves
Trump Announces New Tariffs: President Trump unveils new tariffs, including a 35% levy on Canadian imports and planned duties on the EU. This move stokes global trade uncertainty, keeps markets cautious, and complicates dollar direction.
Dollar Trades Near Multi-Year Lows: The U.S. dollar remains near a 3½‑year low as markets price in aggressive Fed rate cuts and react to uncertainty over a potential new, more dovish Fed chair. Persistent low oil prices and easing geopolitical tensions reduce safe-haven demand.
Markets Stay Cautious on Risk Appetite: Risk sentiment is mixed as traders wait for U.S. inflation data and corporate earnings this week. While dollar weakness supports GBP/USD overall, tariff worries could trigger safe-haven flows into USD on headlines.
Last FX Report: 7th - 10th July 2025
Buy Side Target
1.3830
Sell Side Target
1.3500
Current Price
1.3640
Market Outcome
Bearish
As price continued to retrace towards our mid-term targets of 1.3500 and 1.3440 respectively, our traders capitalised on all short-term selling opportunities understanding the market condition using proprietary teachings, tools and theories.
*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:
