GBPUSD: SELL 1.2750, SL 1.2830, TP 1.2600 | 09 Abril 2025

GBPUSD:

After a busy week in which the U.S. moved fully to a protectionist stance on trade (but without a corresponding industrial infrastructure), large-scale tariffs on imports went into effect. The US levies a flat 10 per cent import tax on all goods from all countries, as well as various ‘retaliatory’ tariffs derived by dividing US imports by US exports. After imposing additional 34 per cent tariffs on Chinese goods, China imposed retaliatory 34 per cent tariffs on all goods imported from the US. Unable to find other ways to deal with the problem, the Trump administration threatened to impose additional 50 per cent tariffs on all Chinese goods, which will take effect on April 8.

US data is back to the forefront this week, with Consumer Price Index (CPI) data to be released on Thursday, followed by the Producer Price Index (PPI) on Friday and the results of the University of Michigan (UoM) Consumer Sentiment Index survey.

Investors are again betting that the Federal Reserve (Fed) will start cutting interest rates to stave off a recession, according to CME's FedWatch tool. Betting markets are forecasting interest rate cuts of nearly 200 bps by the end of 2025, even as the Fed continues to deliver mean-spirited policy statements, warning that trade uncertainty is making it harder, not easier, for the Fed to cut rates.

Trading recommendation: SELL 1.2750, SL 1.2830, TP 1.2600

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