FX Report: 21st - 24th July 2025
Buy Side Target
1.3530
Sell Side Target
1.3300
Current Price
1.3400
Price on GBPUSD has has retraced a significant 423 pips from our mid-term long target of 1.3770. It is now approaching our mid-term sell target levels of 1.3360 and 1.3300 respectively. Currently the market, since Tuesday 15th July, has remained in a neutral state, confirming that momentum to the downside has decreased and there is agreement in price between the regions of 1.3480 and 1.3360. Our traders will be keeping keen eyes through out the week to understand whether there are suggestions for price continuing further down or reversing from this key anticipated level. Should buyer's take control, we can see price reach 1.3530 and 1.3700 respectively. There is a possibility of a test of the 1.3300 region before doing so, key fundamentals for the US and UK this week will further help in gauging new information with market expectations.
United Kingdom: Fiscal Pressure and Inflation Concerns
UK Borrowing Surges: UK public sector net borrowing rises to £20.7 billion in June, significantly above forecasts of £17.1 billion. This marks the second-highest June borrowing since 1993 and raises fresh concerns about the sustainability of UK fiscal policy. The pound faces pressure as markets digest the implications for future government spending and gilt issuance.
Grocery Inflation Worries Consumers: Grocery price inflation climbs to 5.2% in the four weeks leading to July 13—the highest since January 2024. Nearly two-thirds of UK households report growing concerns about food affordability, which puts pressure on discretionary consumer spending and may weigh on GDP in the months ahead.
BoE Rate Cut Expectations Build: Markets are increasingly pricing in a 25 basis point interest rate cut from the Bank of England at its upcoming policy meeting. With softening economic data and inflation still elevated in some categories, the BoE faces pressure to balance easing growth against lingering cost-of-living challenges.
United States: Dollar Steady Amid Trade Uncertainty
Dollar Range-Bound on Trade Risk: The U.S. dollar remains range-bound as markets await clarity on whether President Trump’s administration will follow through with additional tariffs by the August 1 deadline. This cautious backdrop limits major moves in GBP/USD and keeps risk sentiment neutral.
Tariff Delay Signals from Treasury: U.S. Treasury Secretary Bessent indicates that trade deal quality is more important than the deadline, hinting at a potential delay. This tempers safe-haven demand for the dollar and offers mild relief to risk-sensitive currencies like sterling.
Last FX Report: 11th - 17th July 2025
Buy Side Target
1.3700
Sell Side Target
1.3350
Current Price
1.3500
Market Outcome
Bearish
As expected, the market continued its bearish push for a further retracement to our level of 1.3360. Understanding this our traders took advantage of any selling opportunities the market had presented also watching for changes in market sentiment at our key levels. This allowed our traders to be in and out short-term with managed risk using our proprietary tools and indicators.
*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:
