LONG GBP/USD — Three Talking Points
Macro & Central-Bank Divergence
UK growth beats, retail sales jump and service-CPI re-accelerates to 5.4 % y/y. Markets have pushed BoE-cut odds to near-zero for June and just one 25 bp trim by year-end, while the Fed is still priced for two cuts in 2025.
IMF nudges 2025 UK GDP up to 1.2 %. In contrast, the dollar narrative is hampered by ballooning U.S. deficit worries and tariff-policy whiplash. Net policy path favours sterling over the dollar.
Technical Structure Remains Bullish
Price action is riding a January-origin ascending channel; Monday’s spike to 1.3600 set a new three-year high, but the pull-back stalled exactly where the 21-DMA, prior breakout shelf and channel floor cluster (mid-1.34s).
14-day RSI ≥ 60 yet still shy of overbought, signalling bullish momentum with room to run.
Holding the 1.3440/70 zone keeps the next leg toward 1.3600/1.3750 in play; only a daily close below 1.3370 would break the channel and negate the setup.
Event Risk Favouring Upside Skew
BoE speakers (Pill today, Bailey tomorrow) are likely to echo the “cautious & gradual” line—supportive, not dovish.
FOMC minutes may sound hawkish, but the market has largely heard it; any dovish nuance quickly re-ignites dollar selling.
Friday’s PCE vs. Tokyo CPI: a soft U.S. core PCE print alongside sticky Japan inflation would weigh on USDJPY and bleed into broader USD softness, lifting cable toward our T1/T2 objectives.
Macro & Central-Bank Divergence
UK growth beats, retail sales jump and service-CPI re-accelerates to 5.4 % y/y. Markets have pushed BoE-cut odds to near-zero for June and just one 25 bp trim by year-end, while the Fed is still priced for two cuts in 2025.
IMF nudges 2025 UK GDP up to 1.2 %. In contrast, the dollar narrative is hampered by ballooning U.S. deficit worries and tariff-policy whiplash. Net policy path favours sterling over the dollar.
Technical Structure Remains Bullish
Price action is riding a January-origin ascending channel; Monday’s spike to 1.3600 set a new three-year high, but the pull-back stalled exactly where the 21-DMA, prior breakout shelf and channel floor cluster (mid-1.34s).
14-day RSI ≥ 60 yet still shy of overbought, signalling bullish momentum with room to run.
Holding the 1.3440/70 zone keeps the next leg toward 1.3600/1.3750 in play; only a daily close below 1.3370 would break the channel and negate the setup.
Event Risk Favouring Upside Skew
BoE speakers (Pill today, Bailey tomorrow) are likely to echo the “cautious & gradual” line—supportive, not dovish.
FOMC minutes may sound hawkish, but the market has largely heard it; any dovish nuance quickly re-ignites dollar selling.
Friday’s PCE vs. Tokyo CPI: a soft U.S. core PCE print alongside sticky Japan inflation would weigh on USDJPY and bleed into broader USD softness, lifting cable toward our T1/T2 objectives.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.