News
7x24
Quotes
Economic Calendar
Video
Data
- Names
- Latest
- Prev.
GBP/USD Awaits Breakout as Monetary Policy and Geopolitical Storms Loom
Economic
Summary:
The Pound Sterling holds steady near 1.3590 against the US Dollar as traders brace for interest rate decisions from the Fed and BoE this week.
Buy
TradingGBPUSD
EXP
1.36002
Entry Price
1.37500
TP
1.35100
SL
1.35627 -0.00100 -0.07%
0
Point
Flat
1.35100
SL
CLOSING
1.36002
Entry Price
1.37500
TP
The Pound Sterling traded narrowly higher near 1.3590 against the US Dollar on Monday, hovering within the tight range established last Friday, as global investors adopt a wait-and-see approach ahead of crucial monetary policy decisions from both the Federal Reserve and the Bank of England later this week. Sentiment in the GBP/USD market remains subdued, reflecting widespread caution driven by not only domestic economic signals but also growing geopolitical turbulence.
Market expectations for both the Fed and the BoE point toward a status quo outcome, with no change in interest rates. Yet, investors are fully aware that the guidance accompanying those decisions could significantly sway expectations for the months ahead. In the United States, the Federal Reserve is widely anticipated to maintain its federal funds rate within the current 4.25%–4.50% range. However, the central bank’s updated Summary of Economic Projections, particularly the dot plot, is likely to be the key driver for USD sentiment this week. Traders will be seeking clues on whether the Fed plans to keep policy tight well into 2025, especially as it grapples with conflicting signals from inflation data and a shifting fiscal landscape under President Donald Trump’s new economic agenda.
Fed policymakers have been cautious in recent commentary, suggesting that inflationary risks remain and that monetary easing is not yet on the table. Officials appear hesitant to move until they gain more visibility on how Trump’s economic plans — including tax cuts and trade protectionism — will affect consumer prices and broader economic momentum. While headline inflation has cooled, core measures remain sticky, prompting the Fed to advocate patience. The US Dollar Index, which measures the greenback against a basket of major currencies, softened slightly to around 98.00 on Monday, providing some room for the Pound to stabilise.
Across the Atlantic, the Bank of England faces its own balancing act. Markets largely expect the BoE to leave interest rates unchanged at 4.25% during Thursday’s policy meeting. The central bank’s May decision, which included a 25-basis-point cut, was framed as part of a “gradual and careful” approach to policy easing. However, whether that message will be reiterated this week is uncertain, especially after recent data revealed a softening UK labour market. Job growth has slowed markedly in the three months ending April, suggesting that the post-pandemic hiring boom may be losing steam.
A key factor behind the cooling in employment appears to be fiscal in nature. In April, Chancellor Rachel Reeves enacted an increase in employers’ National Insurance contributions, raising them from 13.8% to 15%. The higher payroll tax burden has prompted many businesses to curb hiring plans, adding to concerns that tighter fiscal policy could amplify headwinds in the UK’s economic recovery. With inflation still not firmly anchored and wage pressures easing, the BoE could strike a more cautious tone, even as it opts to hold rates steady.
Investors will also pay close attention to UK inflation data due Wednesday. The May Consumer Price Index report is forecast to show a further moderation in price growth, consistent with the BoE’s view that inflationary pressures are easing gradually. If confirmed, soft CPI data could bolster the case for the BoE to continue its measured path toward policy normalisation. However, any upside surprise would likely inject volatility into GBP pairs and complicate the central bank’s messaging.
Beyond monetary policy, geopolitical developments are increasingly weighing on investor risk appetite. Tensions between Israel and Iran have flared once again, injecting renewed uncertainty into global markets. Over the weekend, Israeli Defence Minister Israel Katz warned that attacks on Iranian territory could escalate if Iran continues missile launches against Israeli targets. In an interview cited by Euronews, Katz declared, “Tehran will burn if it keeps launching attacks on Israel.” Meanwhile, Iran has threatened to block the Strait of Hormuz — a vital conduit for global oil shipments — raising the risk of energy supply disruptions. According to Reuters, Israeli military forces have already destroyed over a third of Iran’s surface-to-surface missile launchers, further intensifying the conflict.
The broader market mood has shifted into risk-off territory as a result, with investors retreating from risk-sensitive assets like the Pound Sterling. Historically, sterling tends to underperform in times of geopolitical stress, particularly when safe-haven flows boost the US Dollar.
Technical Analysis
From a technical perspective, the GBP/USD pair continues to trade within a bullish structure. A rising trendline remains intact, underpinned by a series of higher lows that suggest the current price action is more of a consolidation than a reversal. Key support is seen around the 1.3500 level, which served as a strong base during previous consolidation phases.
A successful retest of this level may attract fresh buying interest if market sentiment stabilises post-central bank decisions. On the upside, immediate resistance lies around 1.3610 — the previous swing high — followed by 1.3650 and 1.3750, the latter marking a key psychological zone and the upper bound of the current bullish channel.
TRADE RECOMMENDATION
BUY GBPUSD
ENTRY PRICE: 1.3600
STOP LOSS: 1.3510
TAKE PROFIT: 1.3750
Risk Warnings and Investment Disclaimers
You understand and acknowledge that there is a high degree of risk involved in trading with strategies. Following any strategies or investment methodologies is the potential for loss. The content on the site is being provided by our contributors and analysts for information purposes only. You alone are solely responsible for determining whether any trading assets, or securities, or strategy, or any other product is suitable for you based on your investment objectives and financial situation.
Quick Access to 7x24
Quick Access to More Editor-selected Real-time News
Exclusive video for free
FastBull project team is dedicated to create exclusive videos
Real-time Quotes
View more faster market quotes
More comprehensive macro data and economic indicators
Members have access to entire historical data, guests can only view the last 4 years
Member-only Database
Comprehensive forex, commodity, and equity market data
English
English
العربية
繁體中文
简体中文
Bahasa Melayu
Bahasa Indonesia
ภาษาไทย
Tiếng Việt
Copyright © 2025 FastBull Ltd
Home News Columns 7x24 Economic Calendar Quotes Video Data WarehouseAnalysis AI Signal Pro User Agreement Privacy Policy About Us
Risk Disclosure
The risk of loss in trading financial assets such as stocks, FX, commodities, futures, bonds, ETFs or crypto can be substantial. You may sustain a total loss of the funds that you deposit with your broker. Therefore, you should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources.
No consideration to invest should be made without thoroughly conduct your own due diligence, or consult with your financial advisors. Our web content might not suit you, since we have not known your financial condition and investment needs. It is possible that our financial information might have latency or contains inaccuracy, so you should be fully responsible for any of your transactions and investment decisions. The company will not be responsible for your capital lost.
Without getting the permission from the website, you are not allow to copy the website graphics, texts, or trade marks. Intellectual property rights in the content or data incorporated into this website belongs to its providers and exchange merchants.