GBPUSD: BUY 1.3330, SL 1.3310, TP 1.3420 | 15 May 2025

GBPUSD:

GBP/USD received a bid on Tuesday, rising above 1.3300 and reversing losses from earlier in the week as global markets tilted and pivoted around general dollar flows based on broad market sentiment. UK employment data had little impact and market reaction to US Consumer Price Index (CPI) inflation was similarly weak. Investors continue to focus on hopes that the ongoing trade deal negotiations between the Trump administration and literally everyone else continue to drive overall sentiment, but all of the trade tariff concessions made by the Trump team have been purely temporary in nature.

The ILO quarterly unemployment rate for the UK rose slightly to 4.5% as expected, while the number of jobless claims in April rose much less than expected to just 5.2k. Nevertheless, the figure is still not as good as March's -16.9k drop in new jobless claims. In the US, CPI inflation eased slightly in April and annual core inflation fell to a new three-year low. However, the Trump administration's trade strategy of imposing triple-digit tariffs against its major trading partners is expected to begin to be implemented in May, and market experts generally expect this to be the last decent CPI reading for some time.

Until Thursday, Pound markets will await the latest UK Gross Domestic Product (GDP) growth figures for the first quarter. Mid-market forecasts expect GDP growth for the quarter, suggesting that Q1 GDP will rise to 0.6 per cent, up from 0.1 per cent in the previous quarter. On an annualised basis, forecasters expect last year's GDP slowdown to still weigh on the data and forecast GDP for the quarter to decline to 1.2% from 1.5%.

Trading recommendation: BUY 1.3330, SL 1.3310, TP 1.3420

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