FX Report: 4th - 7th August 2025
Buy Side Target
1.3400
Sell Side Target
1.2763
Current Price
1.3260
Our mid-term sell target of 1.3300 was achieved last week, with further breaks below providing momentum to the bears on GBP/USD. We may see a retracement in price up towards the 1.3400 region, but for now our mid-term sell targets remain at 1.2763, approximately 500 pips away from current price. It is important to note, it is very possible to see a stall in price between the regions of 1.3300 and 1.3100 to provide sustainability to the current bearish trend. Should this be the case, our traders would use the opportunity to rebalance their portfolio before executing further sells from the current region, it is crucial to pay attention to price and understand the mechanics fully in such scenarios before jumping in the market.
United Kingdom: BoE Signals, Inflation & Growth Risks
Sterling Rises Ahead of BoE Meeting: The pound strengthens to around $1.3306, up ~0.2%, following a weak U.S. jobs report that undercuts the dollar. Despite a ~3.8% drop in July—its worst monthly performance since 2022—GBP is recovering as markets look toward the upcoming Bank of England decision.
BoE Expected to Cut Rates: The Bank of England is widely anticipated to cut its key rate from 4.25% to 4.0% this week amid rising unemployment and trade-related uncertainty. Analysts are pricing in continued rate cuts through 2026. However, divergent views within the MPC and elevated inflation (~3.6% in June) add uncertainty.
United States: Weak Jobs Data & Fed Chair Controversy
Jobs Report Erodes Dollar Support: Friday’s U.S. payrolls report disappoints, showing underperformance and prompting massive revisions to prior data. Treasury yields plunge as markets sharply increase expectations of Fed rate cuts starting in September.
Federal Data Integrity in Question: President Trump’s firing of the head of the Bureau of Labor Statistics, accompanied by concerns over politicisation of statistics and the imminent appointment of a new Fed governor, undermines confidence in U.S. economic reporting and complicates dollar positioning.
Last FX Report: 28th - 31st July 2025
Buy Side Target
1.3730
Sell Side Target
1.3300
Current Price
1.3443
Market Outcome
Bearish
The mid-term bearish direction allowed our traders to capitalise on all selling opportunities safely with minimal risk using our prorietary tools and strategies towards our target of 1.3300 which has now been achieved. Now we have broken below the key level, our traders are eagerly watching for further developments, to prevent irrational trading decisions.
*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:
