GBPUSD: SELL 1.3280, SL 1.3290, TP 1.3180 | 06 May 2025

Event to pay attention today:

17:00 EET. USD- ISM Services Business Activity Index from ISM

GBPUSD:

The GBP/USD pair started the new week on a subdued note and is fluctuating in a narrow trading range around 1.3260-1.3265, near the one-week low reached during the Asian session.

The US Dollar (USD) remains on the defensive below multi-week highs amid heightened economic uncertainty amid US President Donald Trump's tariff plans and is a key supportive factor for the GBP/USD pair. Furthermore, the prospect of more aggressive policy easing by the Federal Reserve (Fed) is further undermining the US Dollar.

Despite a better than expected US non-farm payrolls report on Friday, investors seem convinced that the US central bank will resume its rate-cutting cycle in June and reduce borrowing costs by 100 basis points by the end of this year. This, along with optimism about a potential de-escalation of the trade war between the US and China, is reducing demand for the safe-haven dollar.

However, traders seem reluctant to make new bullish bets on GBP/USD and prefer to wait for this week's key event - the Bank of England's (BoE) monetary policy meeting on Thursday. The UK central bank is expected to cut interest rates by 25bps and take a somewhat soft stance amid downside risks to growth from the trade war.

In addition, this week traders will face the publication of the FOMC meeting minutes, which will affect the USD price dynamics and give a meaningful impetus to the GBP/USD pair.

Trading recomendation: SELL 1.3280, SL 1.3290, TP 1.3180

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