GBPUSD: SELL 1.3390, SL 1.3420, TP 1.3300 | 01 May 2025

Event to watch out for today:

15:30 EET. USD - Quarterly GDP Change in the US

GBPUSD:

The GBP/USD pair continues to fall for the second consecutive session, hovering near 1.3390 during Asian trading on Wednesday. The pair has been under pressure as the US dollar has strengthened amid renewed optimism over trade developments between the US and China. Traders are now turning their attention to the upcoming release of the March Personal Consumption Expenditure (PCE) price index, which is a key inflation gauge for the Federal Reserve.

The U.S. Dollar Index (DXY), which measures the dollar's exchange rate against six major currencies, remains above 99.00, suggesting U.S. Treasury yields are rising. The 2-year and 10-year US bond yields broke a four-day losing streak and were trading around 3.66 per cent and 4.17 per cent respectively at the time of writing.

On the data front, the JOLTS US job openings report released on Tuesday showed a decline in the number of open positions to 7.19 million in March - the lowest level since September 2024 - indicating a cooling in labour demand. The figure fell short of expectations and emphasised growing economic uncertainty.

Adding to GBP/USD's decline are rising expectations that the Bank of England (BoE) will cut rates at its May meeting. Lower inflation expectations in the United Kingdom (UK) and increasing global economic factors favour a rate hike.

Bank of England Governor Megan Green recently stated that tariffs proposed by US President Donald Trump could lead to lower inflation in the UK, although significant uncertainties remain over the broader economic impact and recent tax hikes for employers.

Trading recommendation: SELL 1.3390, SL 1.3420, TP 1.3300

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