GBPUSD Faces Pressure as USD Strength Broadens Across Markets

Summary:

Price has already breached the 100-period MA to the downside, putting the 200-period MA in focus as the next critical support zone.

SELL GBPUSD

Close Time

CLOSED

1.32606

Entry Price

1.30000

1.33900

1.33490 -0.00992 -0.74%

89.1

Pips

Profit

1.30000

1.31715

Exit Price

1.32606

Entry Price

1.33900

U.S. President Donald Trump made a series of remarks on Thursday, emphasizing what he described as a significant breakthrough in trade relations with the United Kingdom. He also hinted that tariffs on Chinese goods could be lowered ahead of this weekend’s high-level trade talks between Washington and Beijing. At the same time, Trump reignited his criticism of Federal Reserve Chair Jerome Powell, underscoring the ongoing tension between the White House and the central bank over the direction of monetary policy.

The Federal Reserve, for its part, held steady on Wednesday, keeping interest rates unchanged for a third straight meeting. Despite persistent calls from President Trump for further rate cuts, the central bank chose to stay the course, pointing instead to rising economic uncertainty as a reason for maintaining a cautious stance.

During his post-meeting press conference, Fed Chair Jerome Powell signaled that the central bank would proceed carefully in the coming months. “There is no need to move hastily,” Powell said, stressing that policymakers will evaluate how U.S. tariffs are affecting inflation, labor markets, and broader economic dynamics, particularly as international trade negotiations continue to evolve.

“We cannot predict how this situation will develop,” Powell added. Still, he acknowledged that risks tied to the global trade environment remain elevated. “My sense is that uncertainty surrounding the economic trajectory is unusually high,” he remarked, reaffirming the Fed’s commitment to a data-dependent, patient approach.

The Federal Open Market Committee (FOMC) voted unanimously to maintain the benchmark federal funds rate in the 4.25%–4.50% range—levels last reached in late 2024 following a full percentage point cut implemented during the prior autumn. In its official statement, the Fed acknowledged that uncertainty had “increased further,” although it also highlighted that economic growth remains “solid,” despite recent noise in export-related data from the early months of 2025.

Meanwhile, across the Atlantic, the Bank of England (BoE) resumed its path of monetary easing at its latest policy meeting. In response to what it described as “heightened unpredictability in the global economic environment,” largely stemming from the U.S. administration’s trade strategies, the BoE lowered its key interest rate by 25 basis points to 4.25%.

The bank’s Monetary Policy Committee (MPC) stated that it is pursuing a forward-looking and medium-term strategy to guide policy in line with its inflation mandate. The May 7 meeting ended with a narrow 5–4 vote in favor of the cut. Notably, two members (Swati Dhingra and Alan Taylor) favored a more aggressive 50-basis-point reduction, while two others (Catherine L. Mann and Huw Pill) voted to hold rates steady at 4.50%.

On the inflation front, the BoE projected a temporary rise to 3.5% in Q3, driven by surging energy prices, before easing back down later in the year. However, its GDP outlook took a hit, with expectations of a sharp slowdown to just 0.1% growth in Q2 and downside risks remaining elevated. GBPUSD Faces Pressure as USD Strength Broadens Across Markets_1

GBPUSD Faces Pressure as USD Strength Broadens Across Markets_1

Technical Analysis

GBPUSD marked a local top around 1.3445 on April 28, but since then, the pair has come under sustained bearish pressure. Price action has carved out a near-term support level at 1.3267 and has failed to print a new higher high—an early signal that the recent bullish structure could be weakening.

Should the pair break below current support, the next potential target lies near 1.2990, aligning with the 0.618 Fibonacci retracement level, which could serve as a key magnet for sellers.

The 100-period and 200-period moving averages on the 4-hour chart are positioned at 1.3318 and 1.3441, respectively. Price has already breached the 100-period MA to the downside, putting the 200-period MA in focus as the next critical support zone. A clean break below both averages could accelerate bearish momentum toward the Fibonacci level.

On the flip side, if GBPUSD were to stage a recovery and break back above the descending trendline, this would invalidate the current bearish setup and potentially reignite bullish momentum.

Trading Recommendations

Trading direction: Sell

Entry price: 1.3262

Target price: 1.3000

Stop loss: 1.3390

Validity: May 20, 2025 15:00:00

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GBPUSD Faces Pressure as USD Strength Broadens Across Markets

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