FX Report: 28th - 31st July 2025
Buy Side Target
1.3730
Sell Side Target
1.3300
Current Price
1.3443
We saw our short-term bullish target of 1.3530 being achieved from last week's analysis, after which we had a 173 pips worth of sell off, due to the mid-term bearish pressure on GBP/USD. This allowed our trader's to protect their capital against short-term market trends, by profit-taking and hedging, while positioning themselves in for the mid-term direction once again. Currently we see GBP/USD back between the regions of 1.3400 and 1.3450 where we had previous bullish pressure exerted on the currency pair, should this hold, our mid-term bullish target would be revised to 1.3730. Our current mid-term sell targets remain at 1.3300 as our previous expectation of 1.3360 has now already been achieved.
United Kingdom: Fiscal Worries & Persistent Inflation
UK Borrowing Stokes Fiscal Concerns: UK public sector net borrowing rises to £20.7 billion in June, significantly exceeding forecasts. The inflation-driven increase in debt servicing costs amplifies fiscal pressure and weighs on investor confidence in UK economic management, adding downward pressure on the pound.
Inflation Expectations Climb: According to the Citi/YouGov survey, short-term UK inflation expectations rise to 4.0%, while longer-term expectations edge up to 4.2%. These persistent inflation concerns fuel uncertainty over the Bank of England's policy path and reduce the probability of aggressive rate cuts in the near term.
United States: Trade Relief Supports Dollar
USD Gains as Tariff Risk Premium Eases: Following successful trade agreements with the EU and Japan, markets begin to price out some of the tariff risk premium. As a result, the U.S. dollar gains strength, positioning itself to post its first monthly advance in 2025.
Remaining Trade Uncertainty Lingers: Despite progress with major partners, several countries still struggle to finalise agreements ahead of the August 1 tariff deadline. This sustains cautious sentiment and maintains demand for the dollar as a safe-haven asset.
U.S.–China Truce Developments Offer Relief: Ongoing negotiations in Stockholm between the U.S. and China lead to an agreement to explore extending the current tariff pause beyond August. This injects optimism into global markets and tempers volatility across major currency pairs.
Last FX Report: 21st - 24th July 2025
Buy Side Target
1.3530
Sell Side Target
1.3300
Current Price
1.3400
Market Outcome
Short-term Bullish, Mid-term Bearish
We were stuck in a neutral phase on GBP/USD, this showed acceptance of lower prices between the regions of 1.3360 and 1.3450, providing sustainability to the downside move originating from 1.3750. Using our proprietary tools and softwares, our traders were able to capitalise on the short-term buys presented by the market and rejoin the bearish move from 1.3580.
*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:
