GBPUSD: BUY 1.3505, SL 1.3455, TP 1.3575 | 26 Agustus 2025

Event to watch today:

25.08 17:00 EET. USD - Primary Home Sales

GBPUSD:

Sterling’s fundamental support stems from a softer dollar on rising expectations of a Fed cut and a cautiously hawkish Bank of England. UK disinflation over the summer has been slow, the labor market remains tight, and wage growth is resilient. This keeps the BoE signaling that the room for deep rate cuts is limited, which is positive for GBP via the yield differential channel.

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An additional tailwind for the pound is the stabilization in consumer activity in both the U.S. and UK alongside dollar softness. Falling U.S. yields after dovish Fed signals make sterling more attractive versus the USD, while the risk premium around the UK economy remains manageable. Communications from some BoE members about a gradual approach to further decisions reduce the likelihood of aggressive easing and support the currency.

Over the next sessions, markets will reassess rate trajectories: any confirmation of a softer Fed path alongside a neutral/cautious BoE stance increases the odds of further GBPUSD strength. Upside UK inflation or growth disappointments are risks to this view, but today the fundamental balance remains in sterling’s favor.

Trading recommendation: BUY 1.3505, SL 1.3455, TP 1.3575

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