News
7x24
Quotes
Economic Calendar
Video
Data
- Names
- Latest
- Prev.
Geopolitical Risks and Economic Data Align to Fuel Downside Pressure on GBPUSD
Forex
Economic
Summary:
Recent geopolitical developments may continue to lend strength to the U.S. dollar as a safe-haven currency, reinforcing the bearish bias.
Sell
CLOSEDGBPUSD
End Time
1.35700
Entry Price
1.34600
TP
1.36500
SL
1.35397 -0.00295 -0.22%
204
Points
Profit
1.34600
TP
1.35496
CLOSING
1.35700
Entry Price
1.36500
SL
The United Kingdom's economic outlook dimmed in April as monthly GDP contracted by 0.3%, a sharper decline than the 0.1% drop forecast by economists. This followed a 0.2% expansion in March. According to the Office for National Statistics (ONS), the contraction was primarily driven by a steep fall in exports to the United States, triggered by the recent implementation of trade tariffs. "After posting gains in each of the previous four months, April marked the largest monthly decline on record in goods exports to the U.S., with most categories seeing notable decreases following the introduction of tariffs," stated the ONS.
This deeper-than-anticipated economic slowdown is likely to prompt the Bank of England (BoE) to reassess its “gradual and measured” approach to monetary easing. The central bank adopted this stance in May after it cut interest rates by 25 basis points, bringing the benchmark rate to 4.25%.
In the United States, Thursday’s Producer Price Index (PPI) release added further confirmation that inflationary pressures may be easing at the wholesale level. Headline PPI rose 2.6% year-over-year in May, matching expectations and slightly above April’s 2.5%. However, the core PPI, which strips out the more volatile food and energy components, declined to 3.0% from 3.2%, signaling a continued softening in underlying price growth.
This followed Wednesday’s downside surprise in the Consumer Price Index (CPI), which has strengthened market sentiment that the Federal Reserve may have room to deliver its first rate cut as early as September. A disinflationary environment tends to favor gold prices, as lower interest rate expectations reduce the opportunity cost of holding the non-yielding asset.
Gold’s bullish narrative is also supported by rising geopolitical tensions. Reports that Israel may be contemplating a military strike on Iran have raised fears of heightened conflict in the Middle East. Simultaneously, renewed tariff threats from former U.S. President Donald Trump have added to safe-haven flows, reinforcing the metal’s appeal in periods of political and economic uncertainty.
Meanwhile, last Friday’s U.S. Non-Farm Payrolls (NFP) report for May revealed a stronger-than-expected increase of 139,000 jobs, surpassing the 130,000 consensus estimate. The unemployment rate held steady at 4.2%, and average hourly earnings grew at a firm annual pace of 3.9%, suggesting that while the labor market is cooling, it remains fundamentally resilient.
Technical Analysis
GBP/USD recently topped out near 1.3630 in the previous session before beginning a downward move that appears to be corrective in nature. If the pair closes below the 100- and 200-period moving averages—currently hovering around 1.3542 and 1.3543 on the one-hour chart—downside momentum could gather pace. Recent geopolitical developments may continue to lend strength to the U.S. dollar as a safe-haven currency, reinforcing the bearish bias.
At the same time, the Relative Strength Index (RSI) reached the 70 level during the latest bullish leg, placing it firmly in overbought territory. This level is being closely monitored for signs of bearish divergence or rejection, which could signal a deeper pullback. Should the RSI fail to break higher, a rejection here may accelerate price action toward the next key support at 1.3460. The 1.3616 resistance level appears to be exerting considerable selling pressure. If this barrier remains intact, the downward correction could extend. However, a decisive breakout above this level would likely trigger renewed bullish momentum, potentially driving the pair toward the 1.3650 region.
Trading Recommendations
Trading direction: Sell
Entry price: 1.3570
Target price: 1.3460
Stop loss: 1.3650
Validity: Jun 20, 2025 15:00:00
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.