GBPUSD: SELL 1.2850, SL 1.2960, TP 1.2715 | 08 April 2025

GBPUSD:

The GBP/USD pair is attracting buyers around 1.2830, or the more than one-month low reached in Monday's Asian session, and for the moment appears to have halted its pullback from the six-month peak reached last week. Spot prices are currently trading around the round figure of 1.2900, although gains are not bullish amid the gloomy outlook for the global economy.

The imposition of substantial retaliatory tariffs by US President Donald Trump last Wednesday has led to concerns about the escalation of a trade war, which could potentially have a negative impact on the global economy. This has had a significant impact on investor sentiment, as evidenced by the decline in global stock markets. This has led to a flight towards the relative safety of the US Dollar (USD) against its British counterpart, exerting a headwind for the GBP/USD pair.

However, USD bulls seem reluctant to make aggressive bets amid growing expectations that a tariff-induced slowdown in US business activity could force the Federal Reserve (Fed) to resume its rate-cutting cycle soon. Market analysis indicates the likelihood of four quarter-basis point rate cuts in 2025. This, coupled with a surge in anti-risk sentiment, is driving US Treasury bond yields sharply lower and undermining the dollar.

Trading recommendation: SELL 1.2850, SL 1.2960, TP 1.2715

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