GBPUSD: BUY 1.3270, SL 1.3220, TP 1.3360 | 16 May 2025

An event to watch out for today:

09:00 EET. GBP - GDP Volume Change

15:30 EET. USD - Initial Jobless Claims

GBPUSD:

The GBP/USD pair is recovering from recent losses and is trading near 1.3280 during the Asian session on Thursday. The pair is supported by the weakening US Dollar (USD) as investors assess the ongoing trade uncertainty despite a slight easing in tensions. Market attention will now shift to the release of US retail sales and Producer Price Index (PPI) data later in the day.

Speculation is emerging that Washington may prefer a weaker dollar to bolster its trade position. The Trump administration argues that a strong dollar compared to weaker regional currencies puts U.S. exporters at a disadvantage.

Nevertheless, downward pressure on the US dollar may be limited. Improving global trade sentiment has eased recession fears and reduced expectations of aggressive rate cuts by the Federal Reserve (Fed). According to LSEG, there is a 74% probability of a 25 basis point rate cut in September, down from a previously forecast rate cut in July.

Meanwhile, the British Pound (GBP) is holding steady as traders reassess the Bank of England's (BoE) policy outlook following Tuesday's labor market data for the three months ending March. The report showed a slowdown in job growth, a rise in the unemployment rate and weakening wage growth, suggesting that employers have cut jobs ahead of higher social security contributions coming into effect from April.

Trading recommendation: BUY 1.3270, SL 1.3220, TP 1.3360

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