FX Report: 25th - 28th August 2025
Buy Side Target
1.3730
Sell Side Target
1.3330
Current Price
1.3497
Last week confirmed to us a that price has decided to continue the mid-term sell direction after stalling around 1.3570. Our short-term sell target of 1.3400 was achieved as a result. Should price break above 1.3570 then we can see an extension to 1.3730 or else we are looking to revisit 1.3330 and lower in the coming weeks.
United Kingdom: Inflation Dynamics & Labour Market Pressure
Food Inflation Accelerates Further
UK food price inflation rises to 4.2%, driven by steep increases in staples such as eggs, butter, chocolate, beef, and coffee. This marks the highest level since early 2024 and adds pressure on real household incomes and consumer sentiment.
Persistent Overall Inflation and Sticky Core
Monthly headline inflation remains elevated, with CPI holding at 3.8% in July. Core inflation, meanwhile, continues to resist downward movement, keeping the Bank of England cautious despite recent rate cuts.
Rising Unemployment Signals Labour Market Softening
A think-tank projects UK unemployment to rise to around 5% in Q3—its highest level since 2021—reflecting a weakening labour market. Yet, wage growth remains robust at around 5%, presenting a dilemma for policymakers balancing between economic slack and inflation.
United States: Federal Reserve, Tariffs & Market Volatility
Fed Dovish Tilt Controls USD Weakness
At Jackson Hole, Fed Chair Powell points to rising chances of a September rate cut, which supports GBP/USD as markets price in Fed easing.
Market Volatility Stirs Amid Fed Personnel Turmoil
Former Fed Governor Lisa Cook is fired, raising concerns about the central bank’s independence. The dollar weakens as U.S. stocks and bonds react nervously, prompting some safe-haven flows back into gold.
Last FX Report: 18th - 21st August 2025
Buy Side Target
1.3730
Sell Side Target
1.3400
Current Price
1.3553
Market Outcome
Bearish
Having identified the key level where we could see a continutation in the mid-term sell off, our traders positioned themselves back with the trend and capitalised on downturn movement on GBPUSD down to 1.3400 using our proprietary 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:
