Trendline Support Could Spark a New Bullish Surge in GBPUSD

Manuel

Central Bank

Economic

Summary:

This area has previously acted as a support level, serving as a springboard for upward momentum.

BUY GBPUSD

Close Time

CLOSED

1.35200

Entry Price

1.37500

1.34500

1.36247 -0.00272 -0.20%

70.0

Pips

Loss

1.34500

1.34499

Exit Price

1.35200

Entry Price

1.37500

Federal Reserve Chairman Jerome Powell recently commented on the current state of the U.S. job market, indicating that any uptick in layoffs could quickly push the unemployment rate higher, suggesting a more fragile labor market than some had anticipated. This underlines the Fed’s cautious stance as they continue to assess inflation and employment data, holding off on any major policy decisions for the time being.

Meanwhile, St. Louis Fed President Alberto Musalem expressed more optimism about the U.S. economy, noting that the labor market is near full employment. However, he also warned that inflation risks are tilted to the upside, particularly due to the lingering effects of tariffs, which have yet to fully materialize. A weaker U.S. dollar could contribute to these inflationary pressures in the months ahead.

Looking ahead, the economic agenda will feature remarks from key Fed officials, including Governor Christopher Waller and San Francisco Fed President Mary Daly. In the UK, market participants will be closely monitoring GDP and industrial production data, as well as manufacturing figures, which could impact market sentiment.

On the trade front, with reciprocal tariffs delayed until August 1, investors are betting that the Trump administration may delay or further suspend both the tariff packages announced earlier in April and new tariffs targeting specific countries and sectors. Markets remain hopeful that many of Trump’s tariff threats will not come to fruition, and traders’ confidence is growing as inflationary pressures from these tariffs have been relatively muted.

UK GDP data for May is expected to show a weak recovery, with limited impact on market sentiment, as the numbers are forecast to remain below expectations. The Office for Budget Responsibility (OBR) has raised concerns about the long-term sustainability of UK public finances, citing rising state pension costs and growing climate-related demands.

The Bank of England (BoE) recently highlighted the challenges facing global financial stability, noting geopolitical tensions, fragmented trade flows, and rising sovereign debt pressures. While UK banks remain well-capitalized, the BoE warned that global financial conditions are becoming more challenging, with asset valuations remaining elevated and susceptible to sharp corrections. Trendline Support Could Spark a New Bullish Surge in GBPUSD_1

Trendline Support Could Spark a New Bullish Surge in GBPUSD_1

Technical Analysis

GBP/USD recently underwent a bearish pullback after a strong bullish move that peaked at 1.3790 on July 1. Since then, the price has retraced to a local low of 1.3527, near the 200-period moving average on the 4-hour chart. This area has previously acted as a support level, serving as a springboard for upward momentum. If this pattern repeats itself, we could see a new bullish move unfold. Should the price reject this zone, another leg higher could follow, targeting previous highs.

Additionally, the 100-period and 200-period moving averages have closely followed the upward trendline, making this area a key support region. As the price approaches these levels once again, it may attract buyers looking for a potential reversal. The RSI has recently dipped to 38, nearing oversold territory, suggesting that downward pressure may be waning. While a further pullback to the trendline is possible, this could lead to a bullish rejection, making long positions favorable from this zone.

Trading Recommendations

Trading direction: Buy

Entry price: 1.3520

Target price: 1.3750

Stop loss: 1.3450

Validity: Jul 22, 2025 15:00:00

Risk Warnings and Disclaimers

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Warren Takunda

Traders' Opinions

Summary:

The British Pound weakened to near 1.3575 against the U.S. Dollar on Thursday as the Bank of England flagged intensifying risks to the UK economy in its mid-year Financial Policy Committee report.

SELL GBPUSD

Close Time

CLOSED

1.35500

Entry Price

1.34000

1.36500

1.36247 -0.00272 -0.20%

40.5

Pips

Profit

1.34000

1.35095

Exit Price

1.35500

Entry Price

1.36500

The British Pound drifted lower against the U.S. Dollar on Thursday, extending its recent decline to trade near 1.3575 as markets digested a series of unsettling developments ranging from fresh warnings by the Bank of England to rising geopolitical and trade tensions. Investors remained cautious ahead of the UK’s latest GDP and manufacturing output figures, expected Friday, while growing fiscal risks and external policy shocks contributed to Sterling’s vulnerability.

The latest move in the Pound came in the wake of the Bank of England’s semi-annual Financial Stability Report, which painted a far more cautious picture of the UK economy than in previous updates. The Financial Policy Committee warned that the risk of sudden asset price declines, market fragmentation, and rising sovereign debt pressures had grown significantly. In particular, the report cited heightened geopolitical tensions, the growing fragmentation of global trade and financial systems, and the UK's own debt trajectory as key concerns. It noted that historical relationships between assets—such as the traditional correlation between bonds and equities—could break down further, raising the risk of instability in financial markets.

What stood out in the report was not just the tone, but the underlying worry about the UK’s fiscal and investment climate. Business sentiment, already fragile amid political transitions and tax uncertainty, was flagged as a key downside risk. The Bank pointed to a pronounced hesitancy among UK businesses to commit to new investments, a trend that threatens to undermine labor market gains and stall productivity improvements. In an economy already experiencing anaemic growth, this is a red flag.

Further clouding the domestic picture are mounting concerns about the UK’s fiscal discipline. Just last week, Chancellor of the Exchequer Rachel Reeves announced a significant expansion in Universal Credit—a move that, while aimed at easing household pressures, also risks undermining the government’s commitment to restoring fiscal balance. The announcement raised eyebrows across the economic and political spectrum, with critics questioning whether such large-scale spending initiatives are prudent at a time when the UK’s sovereign debt remains elevated and interest costs are high. In the aftermath, yields on UK government bonds moved higher, reflecting increased investor concern over future borrowing needs.

Internationally, another curveball came from Washington, where President Donald Trump announced a sweeping package of new tariffs targeting 21 nations. The tariffs, which are set to go into effect on August 1, mark a dramatic escalation in the U.S. administration’s trade policy and have injected fresh uncertainty into an already jittery global economy. While the list of targeted countries has yet to be fully disclosed, fears are mounting that the UK—already grappling with its post-Brexit trade realignment—could find itself indirectly affected through supply chain disruptions or retaliatory measures from its trading partners.

The Pound's weakness reflects not only the domestic fragilities outlined by the Bank of England but also broader concerns about where the global economy is headed next. With a fresh wave of trade protectionism from the United States threatening to upend market equilibrium and the UK’s own political and fiscal credibility in question, investors are showing a clear preference for the safety of the U.S. Dollar.

Technical Analysis

From a technical perspective, GBP/USD continues to trade within a descending channel on the short-term charts. Price action has repeatedly tested the neckline of this pattern after a period of corrective consolidation, indicating potential for renewed downside pressure. The 100-period Simple Moving Average hovers well above the price, confirming the prevailing bearish structure. Momentum indicators such as the MACD suggest a weakening of bullish momentum, adding weight to the bearish case.

The price is now consolidating just above key support, with traders watching for a confirmed breakdown below the neckline to validate a continuation of the bearish trend. Should this occur, the pair could slide toward the next significant support level near 1.3400, which aligns with the intersection of the descending wedge’s lower boundary and the long-term ascending trendline. Failure to hold this level would invite deeper losses, possibly extending the decline toward the 1.3300 zone in the coming weeks.

TRADE RECOMMENDATION

SELL GBPUSD

ENTRY PRICE: 1.3550

STOP LOSS: 1.3650

TAKE PROFIT: 1.3400

Risk Warnings and Disclaimers

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Warren Takunda

Traders' Opinions

Summary:

USD/JPY rose toward 146.30 on Thursday amid ongoing U.S.-Japan trade tensions and a stable dollar following the Fed’s June minutes.

BUY USDJPY

Close Time

CLOSED

146.600

Entry Price

148.000

145.300

156.835 -0.025 -0.02%

24.3

Pips

Profit

145.300

146.843

Exit Price

146.600

Entry Price

148.000

The U.S. Dollar extended its strength against the Japanese Yen on Thursday, with the USD/JPY pair edging toward 146.30 during the European session, as investors parsed through conflicting trade headlines and a cautiously hawkish Federal Reserve. The pair’s movement reflects a market caught between rising geopolitical trade uncertainty and steady signals from the U.S. central bank that suggest policy will remain on hold for now.

The recent rally in USD/JPY, while modest, comes amid intensifying scrutiny of the evolving economic relationship between Washington and Tokyo. Earlier in the week, President Donald Trump imposed 25% tariffs on Japanese imports—set to take effect on August 1—citing what he called Japan’s "stiff" stance on agriculture and a persistent imbalance in automotive trade. While the tariff rate was ultimately softer than Trump’s earlier suggestion of as high as 35%, it nonetheless reignited concerns about a potential breakdown in bilateral trade negotiations.

“They're very tough. You have to understand—they're very spoiled,” Trump said during a press event, casting doubt on whether a comprehensive trade deal can be reached. He warned that further tariff hikes, possibly to the 30%-35% range, remained on the table if progress stalls. The remarks marked a sharp rhetorical shift that temporarily weighed on risk sentiment, though markets have since stabilized in anticipation of resumed talks.

In response, Japanese Prime Minister Shigeru Ishiba struck a more diplomatic tone, telling reporters on Tuesday that Japan remains committed to a constructive dialogue with the United States. “We aim to find a trade deal that benefits both nations,” he said, per Reuters, underscoring Tokyo’s preference for cooperation over escalation.

The outcome of the upcoming rounds of negotiations will be closely watched by currency traders, as the imposition of tariffs could affect Japan’s export-driven economy and, by extension, pressure the Bank of Japan to maintain ultra-accommodative monetary policy longer than anticipated.

For now, however, the Yen remains under modest pressure, especially with U.S. interest rates still significantly above those in Japan. This yield differential continues to favor the Greenback, particularly in an environment where the Fed appears in no rush to pivot toward easing.

Minutes from the Federal Reserve’s June 17–18 policy meeting released late Wednesday reinforced the narrative that the central bank is likely to hold rates steady in the near term, unless there’s a material change in inflation or economic activity. While several members acknowledged risks from rising tariffs and slower global growth, most agreed that the recent inflation pickup is “modest” and likely transitory, thereby reducing urgency for immediate action.

The U.S. Dollar Index (DXY), which tracks the Greenback’s performance against a basket of major currencies, remained calm around 97.40. Traders interpreted the Fed’s language as slightly hawkish, with no clear sign of a near-term rate cut, lending support to the dollar across the board, including versus the Yen.

This policy contrast—between a steady Fed and a still ultra-loose BoJ—continues to be a core pillar of the USD/JPY bullish bias. Unless the Bank of Japan shifts toward normalization or the Fed unexpectedly turns dovish, the pair may retain upward pressure in the coming sessions.

Technical Analysis

From a technical standpoint, USD/JPY is navigating a short-term bullish correctional trend. The pair recently pulled back slightly from intraday highs, but this decline appears to be a technical pause rather than a trend reversal. Price action is respecting the upward bias line, and the pair continues to trade above the 50-period Exponential Moving Average (EMA), reinforcing the broader bullish setup.

Additionally, Relative Strength Index (RSI) readings are approaching oversold levels, suggesting a possible exhaustion of the pullback and the emergence of a positive divergence. This setup, combined with early signs of bullish overlapping momentum, points to a potential upward breakout if macro conditions remain supportive.

Traders are now eyeing immediate resistance at 147.14, which represents the next psychological and technical hurdle. A clean break above that level would likely embolden bulls to target higher ranges, particularly if U.S.-Japan trade headlines take a more constructive turn or if risk sentiment continues to stabilize.

On the downside, initial support lies near 145.50, and a break below this zone could trigger a more sustained consolidation phase, especially if trade negotiations falter or Fed rhetoric shifts unexpectedly dovish.

TRADE RECOMMENDATION

BUY USDJPY

ENTRY PRICE: 146.60

STOP LOSS: 145.30

TAKE PROFIT: 148.00

Risk Warnings and Disclaimers

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Gerik

Forex

Summary:

On July 10, 2025, USD/CHF hovered around 0.7950, showing signs of stabilization after sustained weakness. A mix of safe‑haven Swiss franc strength due to trade concerns and looming U.S. tariff headlines pressured the pair. However, a bearish pennant and oversold technical signals (RSI, trendline break) suggest potential for a rebound toward 0.8000–0.8050....

BUY USDCHF

Close Time

CLOSED

0.79699

Entry Price

0.80000

0.79300

0.77820 +0.00091 +0.12%

8.5

Pips

Loss

0.79300

0.79614

Exit Price

0.79699

Entry Price

0.80000

Market Overview

The Swiss franc has rallied in Q1–Q2, gaining 14% vs USD as traders shifted into safe haven assets amid geopolitical and trade uncertainty. Meanwhile USD/CHF is trading below parity, around 0.7950, buoyed by U.S. Treasury strength and dovish Fed minutes showing support for eventual rate cuts. The SNB recently cut rates to 0%, maintaining the option of further intervention. So, while CHF is strong, USD has some support from bond demand and central bank divergence.

Market Sentiment

Sentiment is cautious: the USD is under pressure from fiscal and tariff uncertainties, while CHF remains supported by risk-aversion. Tariff headlines keep markets on edge, but recent stabilization suggests potential short-term relief.

Technical Analysis

USD/CHF rebound setup emerges as dollar finds footing amid tariff-induced weakness_1

Bearish Pennant formed under 0.8000, suggesting a short-term consolidation before a possible reversal

Structure: price broke the bullish correctional uptrend and EMA50, now ranging near 0.7950.

Indicators: RSI is deeply oversold on short timeframes; stochastic signals a corrective bounce.

1‑hour trendline break and retest imply downside fatigue, setting stage for a counter-trend move .

Trade Recommendation

Entry (Long): 0.7945–0.7960: near bottom of pennant & oversold zone

Take Profit: 0.8000: psychological level, marked by pennant resistance

Stop Loss: 0.7930

Risk Warnings and Disclaimers

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Gerik

Economic

Forex

Summary:

On July 10, 2025, EUR/CAD hovers at 1.6035–1.6045, underpinned by dovish BOC tone, softer oil, and stronger euro outlook. With technical confluence suggesting a bullish breakout, key zones include support at 1.6000–1.6030 and resistance around 1.6100....

BUY EURCAD

Close Time

CLOSED

1.60251

Entry Price

1.61000

1.59750

1.61311 +0.00038 +0.02%

50.1

Pips

Loss

1.59750

Exit Price

1.60251

Entry Price

1.61000

Market Overview

Canadian dollar softness has accelerated lately, weighed by weaker oil prices and dovish commentary from the Bank of Canada. In contrast, the European Central Bank has maintained a moderately hawkish stance relative to Canada, adding strength to the euro. Meanwhile, forecast models predict a modest bullish move over the next month (~2.7%), reinforcing near-term upside into 1.605–1.610 .

Market Sentiment

The setups and wave analysis across timeframes show strong structural bulls: higher highs/lows sustained on D1/H4/H1, with institutional accumulation bias. The dominant feel is buy-on-dips, with sentiment data supporting a medium-term rally.

Technical Analysis

In framework:

Bollinger Bands (20,0,2): Price holds above mid-band (~1.6025–1.6035), riding upper regime—clear bullish signal.

Ichimoku (9,26,52): Candles sit above Tenkan/Kijun and cloud, indicating intraday bullish momentum.

Stochastic (5,3,3): On M15, slightly pulled back but still in bullish zone—momentum intact.

Trade Recommendation

Entry (Long): 1.6025–1.6038 — ideal pullback zone aligned with mid-BB and Ichimoku support

Take Profit: 1.6100 — prior swing high and structural barrier

Stop Loss: 1.5975–1.6000

Risk Warnings and Disclaimers

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Eva Chen

Central Bank

Summary:

The European Central Bank maintains a hawkish monetary-policy stance, while the Reserve Bank of New Zealand (RBNZ) keeps the Official Cash Rate (OCR) at 3.25 % and signals that a further easing path remains open.

SELL EURNZD

Close Time

CLOSED

1.94765

Entry Price

1.92730

1.96700

1.96934 +0.00249 +0.13%

193.5

Pips

Loss

1.92730

1.96700

Exit Price

1.94765

Entry Price

1.96700

Fundamentals

Eurozone: Recent communications from the European Central Bank (ECB) have underscored its firm commitment to fighting inflation. Although June's headline CPI showed a modest deceleration, core inflation remains sticky, prompting markets to scale back expectations for additional rate cuts this year. Several ECB officials have stated that “if inflation rebounds, we will not hesitate to raise rates,” a hawkish tone that has enhanced the euro's appeal.

New Zealand: At its Wednesday meeting the RBNZ left the OCR unchanged at 3.25%. The central bank projects that annual CPI inflation could reach the upper bound of its 1%–3% target range by mid-2025.

However, spare capacity in the economy and easing domestic price pressures are expected to keep overall inflation within the target band, with a return to the 2% midpoint anticipated by early 2026. Elevated export prices and lower interest rates are providing support to the domestic recovery.

That said, rising global policy uncertainty and intensifying trade frictions are likely to weigh on world growth, potentially slowing New Zealand's rebound and exerting additional downward pressure on inflation. The economic outlook therefore remains highly uncertain.

Incoming data on the pace of New Zealand's recovery, the persistence of inflation, and the impact of tariffs will be crucial for the future path of the OCR. Should medium-term inflation pressures continue to ease as projected, the Committee expects to lower the OCR further. (NZD-negative)

Medium-Term Uptrend Intact, but Short-Term Momentum Softens_1

Technical Analysis

The daily chart shows that EURNZD remains in a well-defined uptrend, trading above both the MA20 and MA50, which are aligned bullishly. Since May the pair has traced out a clear step-like ascending structure, indicating that buyers continue to dominate.

On shorter time frames (e.g., the 4-hour chart), however, a bearish crossover (death cross) has emerged, signalling fading momentum and posing a challenge to the prevailing upward structure. Short-term traders are advised to adopt a sell-on-rallies stance and remain alert for a potential pullback.

Trading Recommendations

Trading Direction: Sell

Entry Price: 1.9493

Target Price: 1.9273

Stop Loss: 1.9670

Deadline: July 25, 2025, 23:55:00

Support: 1.9467/1.9432/1.9412

Resistance: 1.9541/1.9571/1.9589

Risk Warnings and Disclaimers

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Eva Chen

Economic

Summary:

After approaching the key psychological level of 200.00 on Wednesday, bullish momentum in GBPJPY eased as expected. Although the pair rebounded on Thursday, it failed to fully shake off the technical pressure from the head-and-shoulders top pattern, indicating that downside risks persist in the near term.

SELL GBPJPY

Close Time

CLOSED

198.574

Entry Price

196.450

199.500

213.683 -0.424 -0.20%

92.6

Pips

Loss

196.450

199.506

Exit Price

198.574

Entry Price

199.500

Fundamentals

Despite facing multiple economic challenges, the British pound has demonstrated resilience in recent sessions. During Wednesday's parliamentary questioning, Prime Minister Keir Starmer did not rule out the possibility of introducing a future wealth tax. However, unlike last week, this statement did not trigger market panic or a sharp sell-off in sterling.

Previously, the Prime Minister's inconsistent stance on welfare reform and delayed confirmation of Chancellor Rachel Reeves' position had raised concerns over policy uncertainty, putting downward pressure on the pound. While the political turmoil has somewhat subsided, reports indicate that the UK still faces severe fiscal and growth challenges, limiting the upside potential for sterling.

Sterling Shows Resilience, but Economic Fundamentals Remain a Concern_1

Technical Analysis

During Thursday's Asian session, GBPJPY found some support in the 198.35–198.40 range, attracting dip-buying interest and curbing the modest pullback from the previous day's high. The spot price remains below the 199.00 level and continues to trade within a head-and-shoulders top pattern on the hourly chart, suggesting that short-term downward pressure remains.

From a medium-term perspective, the upward trend over the past two months has followed a steady ascending channel, indicating that the broader bullish structure is still intact. On the daily chart, oscillators remain in positive territory and have not yet entered overbought conditions, further supporting the possibility of continued bullish momentum.

If GBPJPY can decisively break above the current consolidation zone and the upper boundary of the channel — the psychological 200.00 level — it would signal the start of a new upward wave and open the door for a retest of the yearly high.

Conversely, a break below the key support zone of 198.35–198.40 could trigger additional technical selling, potentially pushing the pair lower toward the next major support area at 197.15–197.10.

Overall, the medium-term trend remains bullish, supported by the channel structure. However, short-term technical pressure persists due to the unresolved head-and-shoulders pattern. A successful break above 200.00 would confirm the resumption of the bullish trend, while a drop below 198.35 would raise the risk of a deeper short-term correction.