GBPUSD: BUY 1.3420, SL 1.3390, TP 1.3490 | 22 May 2025

An event to watch out for today:

09:00 EET. GBP - Consumer Price Index

GBPUSD:

The GBP/USD pair rose slightly on Tuesday, rising towards 1.3400 (but never managed to overcome it). The price is ahead of key inflation and business outlook data, with the UK Consumer Price Index (CPI) due on Wednesday and a double batch of UK and US Purchasing Managers' Index (PMI) survey results due on Thursday.

Trade news remains the key driver for global markets this week. Investors remain hopeful of a deal with the US that will encourage the Trump administration to pull the tariff gun away from the head of its own economy, but the constant drift into the unknown is starting to limit bullish sentiment. The Trump administration is rapidly approaching its self-imposed 90-day deadline to pass a package of “retaliatory tariffs.” While some potential trade deals have been announced, nothing concrete has emerged.

UK CPI inflation for April will be released early Wednesday. Mid-market forecasts expect the monthly CPI to rise to 1.1% m/m from the previous reading of 0.3%. Annual CPI is also expected to rise to 3.3% from 2.6%. UK core CPI inflation is also expected to rise, to 3.6% y/y from 3.4%.

A double batch of UK and US PMIs will be released on Thursday. Markets are expecting a broad-based increase in indexed forward-looking business activity survey results, while mixed data is expected in the US. The US manufacturing PMI for May is expected to decline to 50.1 from 50.2, while the services component is expected to remain unchanged at 50.8.

Trading recommendation: BUY 1.3420, SL 1.3390, TP 1.3490

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