GBPUSD: SELL 1.3450, SL 1.3470, TP 1.3350 | 22 Agustus 2025

Event to watch today:

21.08, 15:30 EET — Initial Jobless Claims

GBPUSD:

The pound is holding near 1.3450 but is fundamentally vulnerable due to a combination of slowing domestic demand and the likelihood of earlier easing by the Bank of England. Softening labor market indicators, rising benefit claims, and cooling wage growth create room for rate cuts without a significant risk of a renewed inflation spike. Nominal gilt yields lag Treasuries, reducing the pound’s appeal to global investors.

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Inflationary pressure in the UK continues to normalize: the slowdown in services inflation and the weakening price impulse in rate‑sensitive sectors support a dovish tilt of the MPC. Against this backdrop, the market is pricing a higher probability of a rate cut at upcoming meetings, narrowing the yield differential with the dollar in the latter’s favor. An additional risk is weak business activity and cautious consumers, which limits GDP recovery.

By contrast, the dollar benefits from the relative resilience of the U.S. economy and Fed communication on the need to keep policy restrictive for longer. The real-rate spread and flows into dollar assets maintain pressure on GBPUSD. As the UK balances between falling inflation and signs of stagnation, the pound remains prone to correction against the dollar when global demand for safe currencies and U.S. debt rises.

Trade idea: SELL 1.3450, SL 1.3470, TP 1.3350

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