FX Report: 25th - 29th May 2025
Buy Side Target
1.3770
Sell Side Target
1.3450
Current Price
1.3560
With clear bullish control in the market, we can expect our mid-term target of 1.3590 being fulfilled shortly, after which 1.3770 and 1.3900 would be the bullish targets respectively. Should we see breaks below 1.3400, we may see further downside movement and price continuation below 1.3300 could allow it to extend to 1.2630 as the regions for GBP/USD as mentioned last week. Significant fundamental factors could force this move to play, but as of now we remain bullish on the Cable until any technical shifts suggest otherwise.
United Kingdom: Economic Resilience Amid Inflation Concerns
IMF Upgrades UK Growth Forecast: The International Monetary Fund upgrades its UK GDP growth forecast for 2025 to 1.2%, reflecting stronger-than-expected first-quarter performance and overall economic resilience. This revision supports bullish sentiment toward the British pound. However, the IMF also warns that ongoing global trade tensions may shave 0.3 percentage points off growth in 2026.
Inflation Pressures Remain Elevated: UK inflation rises to 3.5% in April, exceeding analyst expectations and marking the highest level in over a year. The increase is mainly driven by higher household utility bills. With inflation running hot, the likelihood of a near-term interest rate cut by the Bank of England diminishes. Markets now price in a 93.6% probability that the BoE will hold rates steady at 4.25% during its June meeting.
Sterling Strength Holds Firm: The British pound trades at $1.3547—slightly down by 0.13%—but remains close to a three-year high of $1.359 reached earlier this week. Year-to-date, sterling has gained over 8% against the U.S. dollar, supported by a hawkish BoE stance and persistent inflationary pressure.
United States: Economic Data and Trade Policy Watch
Consumer Confidence in Focus: Markets are watching for the Conference Board’s Consumer Confidence Index, set for release on May 27. The report is expected to provide critical insight into household sentiment amid elevated inflation and lingering trade uncertainties.
Durable Goods Orders Incoming: Also on May 27, the U.S. releases data on durable goods orders, a key indicator of manufacturing health and business investment. Investors will assess whether recent improvements in industrial production translate into sustained demand across key sectors.
Last FX Report: 19th - 22nd May 2025
Buy Side Target
1.3590
Sell Side Target
1.2630
Current Price
1.3370
Market Outcome
Bullish
1.3300 served as a key level for buying opportunities as highlighted last week. With a clear bullish direction in play, our traders capitalised on all short and mid-term buying opportunities, understanding that executions in this region leave minimal risk exposure on their portfolios, with the use of our proprietary tools and strategies.
*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:
