GBPUSD: SELL 1.3540, SL 1.3560, TP 1.3430 | 18 August 2025

Event to watch today:

15.08 15:30 EET. USD - Change in retail sales

GBPUSD:

The pound remains under pressure after the Bank of England cut rates by 25 bps to 4.75% with a split vote of 5–4, which the market interprets as a “hawkish cut.” The MPC minutes emphasized that inflation will slow to 2% only by Q2 2026, creating room for another downward revision.

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At the same time, UK GDP for July fell by 0.2% m/m versus expectations of no change, heightening concerns about an approaching technical recession. Weakness in the real sector caps the pound’s potential, while the dollar is supported by rising U.S. Treasury yields.

The widening UK current account deficit in Q2 to -4.1% of GDP further deteriorates the medium-term balance of payments, making the currency sensitive to flights into dollars during periods of heightened global risk-off.

Trade recommendation: SELL 1.3540, SL 1.3560, TP 1.3430

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