GBPUSD: SELL 1.3425, SL 1.3445, TP 1.3325 | 29 July 2025

GBPUSD:

The pound is sliding to 1.3425, reacting to a fresh slowdown in UK inflation and reduced expectations of further tightening from the Bank of England. The annual CPI for June fell to 2.2%, the lowest since March 2022, allowing the regulator to keep rates unchanged at the August meeting.

Meanwhile, rising Treasury yields intensify capital inflows into dollar assets after a strong US Q2 GDP report (+2.4% q/q). The British economy remains close to stagnation: the services PMI fell to 49.8, indicating shrinking orders and wage pressure.

Political risks also weigh on the pound: the ruling party's parliamentary majority shrank after unscheduled by-elections, complicating the government's implementation of fiscal stimulus. Collectively, this increases the attractiveness of selling the pair ahead of the Fed meeting, where markets price in a possible rate hike by year-end.

Trade recommendation: SELL 1.3425, SL 1.3445, TP 1.3325

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