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Commodities Silver

Silver Price Prediction: XAG/USD Remains Close to $38 with US-EU Trade Deal and Fed Rate Hesitancy

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  • July 28, 2025
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Silver (XAG/USD) moves carefully in the vicinity of the $38.00 level with enhanced market mood from a settled US-EU trade deal diminishing safe-haven demand. The deal, which places 15% duties on Brussels imports, has increased investor risk appetite, evidenced by climbing S&P 500 futures. In the meantime, market players are looking for the Federal Reserve’s next policy decision with expectations that interest rates will be held steady. With the Fed’s extended higher rate policy bearing down on non-yielding assets such as silver, pressure is put on the white metal, particularly as bullish momentum ebbs away, as can be seen in technical readings. KEY LOOKOUTS • The ratified trade deal, featuring 15% tariffs on EU imports, has increased market risk appetite, dampening demand for safe-haven assets such as silver. • Wednesday’s Fed meeting has everyone watching, anticipating steady rates. Any unexpected hawkish cues may continue to pressure silver. • Support is at the June 18 high of $37.32, with resistance near the June 23 high of $39.53. • The RSI declining below 60.00 and silver’s retreat from recent highs indicate fading bullish strength in the near term. Silver (XAG/USD) stays in wary bearishness around the $38.00 threshold as better risk appetite globally, fueled by the completed US-EU trade agreement, diminishes demand for conventional safe-haven assets. The deal, which calls for a 15% import tariff from Brussels, has boosted market confidence, seen in the surge of S&P 500 futures. Meanwhile, the market is focused on the upcoming Federal Reserve policy announcement, where interest rates are expected to be left unchanged. But the Fed’s policy of keeping higher rates for a longer period continues to burden non-yielding assets such as silver, again clouding the bullish picture. Silver (XAG/USD) is trading cautiously at around $38.00 as the US-EU trade agreement improves risk appetite and undermines safe-haven demand. Attention now turns to the Fed’s next policy decision, with stable rates likely to continue exerting pressure on silver prices. • Silver is trading around $38.00, coming under pressure on the downside as global risk appetite improves. • US-EU trade agreement finalized, with the US slapping 15% tariffs on EU imports, enhancing investor sentiment. •Demand for safe-haven assets shrinks as equity markets respond favorably to the trade agreement. •Fed likely to maintain rates unchanged at 4.25%-4.50% during the next policy meeting. •Increased interest rates pressurize silver, a non-yielding rate-sensitive asset. •Technical support at $37.32, with resistance around June 23 high of $39.53. • RSI below 60.00 indicates declining momentum, causing alarm for continuation to the upside. Silver (XAG/USD) is trading with a conservative tone at the $38.00 level, following the news of a US-EU trade deal. The agreement, which involves a 15% tariff on EU imports to the US, has reduced geopolitical tensions and put investor sentiment in a positive mood. Consequently, safe-haven assets such as silver have declined in demand, while equities and riskier assets have become more aggressive. General optimism over the trade agreement has moved attention from metals to growth-driven investments. XAG/USD DAILY PRICE CHART SOURCE: TradingView Market focus now moves to the coming Federal Reserve policy announcement, where the central bank will hold onto the current interest rate bracket. With inflation easing and economic growth solid, the Fed has less need to make rates adjustments in the immediate future. Nonetheless, the extension of higher borrowing rates renders non-yielding assets such as silver unappealing to investors. Silver prices, in the short term, could continue to suffer from general economic optimism and normal monetary policy, unless new geopolitical threats or economic shock trigger safe-haven demand. TECHNICAL ANALYSIS Silver (XAG/USD) has retreated back to the $38.00 handle after hitting recent peaks at around $39.53. The 20-day Exponential Moving Average (EMA) is set as a major support level, suggesting a potential cushion for additional downside. In the meantime, the 14-day Relative Strength Index (RSI) has fallen below the 60.00 mark, which shows declining bullish momentum and hints at a potential reversal to consolidation or slight correction. To the negative, the June 18 high of $37.32 can act as an immediate floor, and the June 23 high of $39.53 still stands as a key resistance hurdle to any new bullish efforts. FORECAST If investor sentiment returns to being cautious following unforeseen geopolitical events or softer economic reports, silver may return to its safe-haven status. A clear break above $38.50 might set the stage for retesting the recent high of approximately $39.53. Sustained buying interest above this resistance could push further gains towards the round psychological $40.00 level, provided the Federal Reserve indicates some dovish lean or deceleration in economic momentum. On the negative side, ongoing optimism about the US-EU free trade agreement and calm interest rate expectations of the Fed may continue to put pressure on silver. A fall below the near-term support of $38.00 could see additional declines to June 18’s high of $37.32. If this level also fails to hold, negative sentiment may accelerate, moving silver prices towards the $36.50 zone in the short run.

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Currencies USD/JPY

Japanese Yen Recover From One-Week Low Against USD, But Gains Capped Despite Mixed Signs

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  • July 28, 2025
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Japanese Yen (JPY) recovered mildly from a one-week low against the US Dollar (USD) at the beginning of the new week following a recent trade agreement between Japan and the US that suggests a possible Bank of Japan (BoJ) interest rate hike later this year. Yet the JPY’s upside seems limited with the softening of inflation in Tokyo, increased domestic political risk, and a general risk-on market mood due to better global trade sentiment. In the meantime, investors tread carefully before crucial central bank decisions from the Fed and BoJ, as well as high-impact US economic releases, all of which could heavily impact the USD/JPY pair’s next major move. KEY LOOKOUTS • Traders wait for this week’s announcements by the Bank of Japan and US Federal Reserve policy for guidance on upcoming interest rate moves, which should significantly impact the USD/JPY cross. • This week’s major US releases such as Q2 GDP, PCE Price Index, and Nonfarm Payrolls might lead to USD/JPY volatility. • Heightening domestic political uncertainty after the recent election loss of the ruling coalition might hold back any tightening action by the BoJ, softening the JPY. • Break above 148.65 might extend to the 149.00 level, while below 147.00 and support thereabouts may provide buying opportunities for the traders. The Japanese Yen began the week with a gentle correction from its recent one-week low versus the US Dollar, underpinned partly by optimism over a trade agreement between Japan and the US, reviving speculation about a possible Bank of Japan rate increase later this year. Nevertheless, the currency’s upside is capped on mixed fundamentals such as weakening inflation in Tokyo, domestic political uncertainty, and better global risk appetite that is shrinking safe-haven demand. Traders are walking on eggshells in anticipation of pivotal central bank decisions from both the Federal Reserve and the BoJ, as well as the all-important US economic data releases, all of which are likely to figure in the next major move for the USD/JPY currency pair. Japanese Yen creeps up from one-week low against the US Dollar but is capped on upside by mixed economic cues and risk-on sentiment in the market. Market participants are cautious ahead of this week’s big central bank announcements and top US data releases. • JPY recovers modestly from one-week low against the USD, buoyed by expectations of a possible BoJ rate increase later in the year. • Mildly subdued USD price movement and Japan’s US trade agreement are among the factors helping the Yen recover intra-day. • Risk-on sentiment fueled by US–EU as well as US–China trade optimism caps safe-haven demand for the Yen. • Softening Tokyo inflation and Japanese political turbulence function as headwinds for JPY strength. • USD/JPY above 148.00, technicals hinting at a potential retest of 148.65–149.00 levels. • Critical support levels are at 147.65, 147.00, and 146.55, with the risk of further losses limited near 145.00. • Traders wait for updates from Fed and BoJ policy and US GDP, PCE, and NFP data to lead future direction. The Japanese Yen started the week on an upbeat note with moderate gains as market mood improved on news of a recent trade pact between Japan and the United States. This transaction revived hopes of the Bank of Japan resuming policy tightening during the latter half of this year, providing some support to the currency. However, more general market conditions are unclear, with investors weighing hope regarding global trade developments against domestic issues within Japan. Specifically, political uncertainty following a severe election setback for the ruling coalition has created skepticism regarding BoJ policy flexibility over the near term. USD/JPY DAILY PRICE CHART SOURCE: TradingView In contrast, the US Dollar approaches the week with a note of caution as the market waits for several high-impact events. Optimism surrounding the resumption of US–China talks and advancement in US–EU trade negotiations has pushed risk appetite higher, while the demand for safe-haven assets such as the Yen has fallen. Investors are in a wait-and-watch mode, waiting for significant policy announcements by the Federal Reserve and Bank of Japan, as well as a series of significant US economic data announcements that are likely to determine the direction in which the market is headed next. TECHNICAL ANALYSIS USD/JPY currency pair indicates a bullish inclination, breaking above the 200-hour Simple Moving Average (SMA) and holding on to gains beyond the 148.00 level. Bullish momentum indicators on both daily and hourly charts favor further upside potential, with the next significant resistance at the 148.65 zone, last week’s high. A clean break above this could provide the way to challenge the psychological 149.00 level. On the negative side, nearest support is around the 147.70–147.65 area, which is supported by the 100-hour SMA and the 23.6% Fibonacci retracement level, with further support around 147.00 and the 146.55 area. FORECAST If bullish pressure persists, the USD/JPY currency pair may experience further gains, particularly if the Federal Reserve remains hawkish in its policy statement or if US economic news surprises to the upside. Any sustained break above the resistance point at 148.65 would potentially lead to a new rally towards the psychological 149.00 level. Improved optimism regarding global trade, combined with stable US Treasury yields, could also continue supporting the pair higher. On the other hand, any dovish communication by the Federal Reserve or a dovish shift by the Bank of Japan would set off a pullback in USD/JPY. A fall below the crucial support area of 147.65–147.70 would expose the pair to additional drops towards 147.00 and even to the 146.55 level. A sudden decline in risk appetite or surprise weakening in future US macro data may also stimulate fresh demand for safe-haven Yen, hammering the pair down.

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Commodities Gold

Gold Faces Weekly Loss on Solid US Data and Fading Safe-Haven Demand

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  • July 26, 2025
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Gold (XAU/USD) is poised to record a weekly loss as firmer-than-anticipated U.S. economic data and better global trade sentiment reduced demand for safe-haven assets. Strong labor market data, such as a fourth straight decline in Initial Jobless Claims, combined with fading concerns over trade tensions—most notably gains in U.S.-EU talks—strengthened the U.S. Dollar and dampened investor demand for Gold. Even with declining U.S. Treasury yields, the metal fell to a weekly low of $3,325, with technicals pointing towards further downside risk if important support levels do not hold. The market is now focusing on the coming Federal Reserve decision and important macroeconomic data, such as Q2 GDP, Core PCE, and Nonfarm Payrolls. KEY LOOKOUTS •  The markets generally anticipate the Fed to leave interest rates steady; surprises or forward guidance could do much to influence Gold prices. •  Solid readings could further bolster the US Dollar and diminish Gold’s attractiveness, while softer data could provide some stimulus for the metal. •  A leading indicator of labor market fitness—ongoing strength might support a hawkish Fed profile, which would put pressure on Gold. • Safe-haven demand may remain subdued, pushing Gold lower, with progress towards a deal continuing to weigh and the potential for renewed buying interest after setbacks. Gold prices will close out the week lower as strong United States economic data and fresh trade optimism temper safe-haven demand. A solid rebound in the United States. Dollar, buoyed by stronger-than-anticipated labor market statistics and indications of advancement in US-EU trade negotiations, has kept the precious metal under pressure. Even as U.S. Treasury yields dipped, XAU/USD dipped to $3,325, its third day of losses in a row. Investors now await the next Federal Reserve policy announcement and a series of key economic reports that may influence Gold’s short-term course further. Gold suffers weekly losses due to robust U.S. data and trade optimism weakening safe-haven demand. XAU/USD weakened to $3,325, with players now waiting for the Fed’s next policy decision and major economic releases. • Gold (XAU/USD) slid to a weekly low of $3,325, weighed down by robust U.S. economic data and softening trade tensions. • U.S. Initial Jobless Claims reduced for the fourth week, indicating strength in the labor market and lowering safe-haven demand. • Durable Goods Orders fell by 9.6% in June, yet Core Orders continued to increase by 0.2%, showing the true resilience of underlying business investment. • Trade expectations had improved after the U.S.-Japan deal, and possibly there is more to come before August 1 on an EU agreement. • The U.S. Dollar rebounded in this report, making Gold pricier to foreigners despite falling Treasury yields. •  Technical support for Gold is around $3,320, where key SMAs converge and RSI goes bearish. •  Future releases such as Fed decision, Q2 GDP, Core PCE, and NFP will play a significant role in determining Gold’s next direction. Gold is set to log a weekly decline amid robust economic data from the United States and softening global trade tensions cutting the metal’s safe-haven demand. Supporting data, such as ongoing declines in Initial Jobless Claims, have continued to prop up expectations for the resilience of the U.S. labor market. At the same time, optimism surrounding trade has gained momentum after an agreement between the U.S. and Japan was finalized, and indications are that a deal with the European Union can be reached ahead of the August 1 deadline. These events have kept investor interest in Gold in check, which normally flourishes during times of insecurity and economic hardship. XAU/USD DAILY PRICE CHART SOURCE: TradingView The U.S. Dollar also picked up momentum this week, making it costlier for foreign buyers to purchase Gold and further testing its attractiveness. Although U.S. Treasury yields have fallen, the optimism in the U.S. economy and trade talks has adequately countered the typical lift Gold gains due to decreasing yields. Market participants are now focused intently on next week’s Federal Reserve interest rate determination and a string of high-impact economics releases, such as GDP, Core PCE, and Nonfarm Payrolls, scheduled to influence market mood and possibly redefine the short-term prognosis for Gold. TECHNICAL ANALYSIS Gold (XAU/USD) has registered three consecutive down days, below the $3,350 level and probing significant support at the confluence of the 20-day and 50-day Simple Moving Averages (SMAs) around $3,342 and $3,332, respectively. The Relative Strength Index (RSI) has become bearish, reflecting waning bullishness in the near term. A sustained break below the $3,320 level would bring out deeper support at the 100-day SMA and the June 30 low of $3,238–$3,246. On the upside, a move above $3,400 would be necessary to regain positive momentum, with possible resistance at $3,438 and the June high of $3,452. FORECAST If future U.S. economic releases, like Q2 GDP or Core PCE, reflect tempering inflation or slowing growth, Gold may re-gain bullish momentum as investors flee to safe-haven assets. Any dovish Federal Reserve tone or any suggestion of future rate cuts can also sustain Gold prices by lessening the opportunity cost of holding non-yielding assets. Geopolitical tensions or stalling in completing trade deals might also fuel the safe-haven demand, which could send XAU/USD higher again above the $3,400 handle. On the other hand, if economic conditions continue to signal strength—particularly via strong Nonfarm Payrolls or resilient consumerism—anticipation of a sustained higher-rate cycle can mount, further pressuring Gold. Further strengthening in the U.S. Dollar and closing of trade agreements, notably with the EU, would certainly bear down on Gold demand. In such an event, XAU/USD may meander down, possibly testing critical support lines around $3,320 or even $3,250 in the near term.

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Commodities Gold

Gold Prices Fall for Second Day on Trade Deal Hopes and Fed Forecast

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  • May 8, 2025
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Gold prices continued their two-day decline, falling close to 1% on Thursday as risk appetite improved in anticipation of a possible UK-US trade deal, pushing investors out of safe-haven assets. Market sentiment improved after both governments made announcements that suggested an agreement was close at hand, although details are still thin. Further pressure on gold was exerted by the Federal Reserve’s move to keep interest rates unchanged and Fed Chairman Jerome Powell’s statements underscoring the U.S. economy’s strength amidst continuing trade tensions. Amidst short-term fixes ruling the market, there are still hedge funds that are optimistic about gold, such as Waratah Capital Advisors, placing bets on its long-term worth amidst global economic volatility. KEY LOOKOUTS • Markets are waiting anxiously for the 14:00 GMT statement by President Trump, with speculation that a speedy agreement might be narrow in scope. A delay or disappointing detail might spur a rebound in gold prices. • Support is being tested at $3,338 immediately, with additional downside potential to $3,311 and $3,245. On the upside, important resistance lies at $3,413 and $3,462 if bullish momentum returns. • The Fed’s keeping rates at 4.25%-4.50% and Powell’s cautious rhetoric indicate no cuts until summer, putting pressure on gold in the near term but allowing room for a rebound if economic indicators soften. • Even after the recent pullback, funds such as Waratah Capital Advisors remain optimistic about gold’s upside potential, banking on longer-term gains in the face of geopolitical uncertainty. Gold prices fell for a second consecutive day on Thursday, dropping close to 1% to $3,333 as optimism about the possibility of a UK-US trade deal and a solid Federal Reserve outlook increased. The expected announcement, due at 14:00 GMT, has lifted risk appetite, and investors have begun to rotate out of safe-haven assets such as gold. Although the details of the agreement are yet to be confirmed, preliminary reports indicate that it might be narrow in scope. Further, the Federal Reserve’s holding of interest rates steady and comments from Chair Jerome Powell on the resilience of the economy have also pinned down gold. Some hedge funds such as Waratah Capital Advisors, however, remain positive and consider gold a strategic hedge during a global trade environment that is uncertain. Gold prices declined almost 1% for a second day in a row as hopes for a UK-US trade deal dampened demand for safe-haven assets. The fall was also underpinned by the Federal Reserve’s consistent interest rate policy and positive economic outlook. •  Gold (XAU/USD) fell almost 1% on Thursday, continuing a correction that started the day before, trading at $3,333 in early European hours. •  Expectation of a UK-US trade deal announcement at 14:00 GMT has enhanced global risk sentiment, leading to a move away from safe-haven assets such as gold. •   Markets are expecting further trade deals to come, which is lowering global uncertainty and leading investors to offload gold holdings. •  The Fed left interest rates at 4.25%-4.50%, indicating that no cuts are likely before summer, which pressured gold further. •  Fed Chairman Jerome Powell recognized the resilience of the economy but cautioned against potential tariff-induced effects down the road. •  Gold has support at $3,338 and $3,311, with firmer technical support at $3,245. Resistance would come in at $3,413 and $3,462 should prices recover. •  In spite of the recent fall, funds such as Waratah Capital Advisors are adding exposure to gold, seeing it as a long-term protection against global trade tensions. Gold prices fell further for the second day in a row as global markets responded positively to reports of an imminent trade deal between the United States and the United Kingdom. The news, due at 14:00 GMT, has given hope of other trade agreements in the offing, as geopolitical tensions have been eased. Such improved optimism has lowered the need for other traditional safe-haven assets such as gold, which investors often use when the climate is not certain. Confirmation from US and UK authorities, including comments from Bloomberg and the Financial Times, has lent credibility to the mooted agreement, although final terms of the deal are unclear. XAU/USD DAILY PRICE CHART CHART SOURCE: TradingView The additional pressure on gold was added by the Federal Reserve’s recent move to keep interest rates unchanged at 4.25%–4.50%, in line with expectations. Fed Chairman Jerome Powell said that although the US economy continues to be strong, the full effects of tariffs and international uncertainty could still be seen later this year. In the absence of any near-term rate cuts to come, which usually favors non-yielding assets such as gold, some investors still believe in gold’s long-term worth. Hedge funds like Waratah Capital Advisors keep supporting gold as a haven in light of persistent trade tensions and possible economic realignments. TECHNICAL ANALYSIS Gold has been recently rejected close to the R1 resistance level of $3,413 after a short-lived rally, indicating significant selling pressure at the area. It is now testing the support at $3,338, which has remained short-term significant during recent sessions. If bearish momentum persists, gold may fall to the next support at $3,311, although this level is symbolic rather than structurally relevant. A more profound correction may find firmer support around $3,245, which has functioned historically as a significant floor. To the upside, a reversal must overcome $3,413 convincingly to aim for the next resistance around $3,462. FORECAST If the forthcoming UK-US trade deal disappoints markets or is seen as symbolic, gold may experience another bout of upward rush as investors pile in looking for safe haven on ongoing uncertainty. Otherwise, any indication of economic weakness to be seen in subsequent US data, or surprise dovish hints from the Federal Reserve, might resuscitate the bullish trend. If that happens, gold might try to regain the $3,413 resistance level, and a breakout above it could pave the way towards $3,462 and higher. Alternatively, if the U.S.-UK trade deal is received positively and leads to more large-scale global agreements, risk appetite might keep increasing, and demand for

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Commodities Gold

Gold Reaches Record High at $3,045 Before Fed Decision as Geopolitical Tensions Rise and the Market Remains Uncertain

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  • March 19, 2025
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Gold reached a new record high of $3,045 on Wednesday amid rising geopolitical tensions and market uncertainty in anticipation of the U.S. Federal Reserve’s interest rate decision. The rally was driven by disconcerting reports from Turkey and Ukraine, and fears of possible economic slowdown in the U.S. even with a temporary ceasefire deal between President Trump and President Putin. While gold’s momentum is still robust, analysts are cautioning of a potential pullback, particularly if the Fed indicates fewer rate cuts than anticipated. While markets wait with bated breath for Jerome Powell’s remarks and economic forecasts, gold traders are eagerly waiting for signals that would determine the next major move in the precious metal. KEY LOOKOUTS • The Fed’s interest rate decision and economic forecasts, which may influence the direction of gold in the subsequent sessions. • Political instability in Turkey and uncertainty in Ukraine are still backing gold prices as safe-haven demand continues to stay high. • Keep an eye on critical resistance levels of $3,048 and $3,063; a break above might spark a new wave of gold bullishness. • Gold’s strong rally could get a near-term correction if the Fed gives cues of less rate cuts or turns hawkish. Gold’s stellar rally to an all-time high of $3,045 is a reflection of increasing geopolitical tensions and increased investor wariness in anticipation of the U.S. Federal Reserve policy announcement. The metal’s safe-haven demand has been supported by political turmoil in Turkey and continued uncertainty in Ukraine, as market players look to the Fed’s interest rate outlook and economic forecasts for 2025 and beyond. A hawkish Fed or less-than-anticipated rate cut signals may provoke a short-term retreat in gold prices. Yet, technical resistance levels at $3,048 and $3,063 are still crucial to monitor, as a break above these levels would ignite more upside momentum. Gold reached a record high of $3,045 in the wake of increasing geopolitical tensions and before the key Fed interest rate decision. Investors now wait for cues on subsequent rate cuts, while technical resistance at $3,048 would decide the direction of gold prices next. • Gold rose to a record high of $3,045 on Wednesday, fueled by geopolitical tensions and market expectation. • Political instability in Turkey and ongoing uncertainty in Ukraine have bolstered safe-haven demand for gold. • Investors are keenly awaiting the Federal Reserve’s interest rate decision and economic forecasts for future policy guidance. • Any hawkish rhetoric from the Fed or lower rate cut expectations could lead to a short-term gold correction. • Technical resistance points at $3,048 and $3,063 may define further upside potential in gold prices. • Levels of support to monitor are $3,024, $3,010, and the psychological $3,000 level. • Gold’s rally may be overbought despite bullish sentiment, with traders wary of a potential pullback. Gold hit a new record high of $3,045 as investors grew increasingly nervous over increasing geopolitical tensions and global economic uncertainty. Prices rose as markets responded to important political events, such as the arrest of Istanbul’s mayor, a prominent opposition leader in Turkey, and persistent turmoil in Ukraine. These occurrences have bolstered gold’s reputation as a historical safe-haven asset, as investors turn to it for security in uncertain global headlines. XAU/USD Daily Price Chart Chart Source: TradingView To the uncertainty, attention now turns to the U.S. Federal Reserve, which will make its most recent interest rate decision and release new economic forecasts. While the market generally expects no change, expectations for future rate reductions have the potential to impact overall market sentiment. With a backdrop of nervous optimism and geopolitical tension, gold remains a focus as a hedge against prospective financial volatility and policy changes. TECHNICAL ANALYSIS Gold’s recent surge to an all-time high of $3,045 reflects robust bullish momentum in the market. The short-term attention now turns to critical resistance levels near $3,048 and $3,063, which may serve as prospective breakout areas in case of further pressure on the upside. On the downside, levels near $3,024, $3,010, and the psychological level of $3,000 are crucial checkpoints in the event of a pullback. While the trend remains positive, traders should stay cautious, as overbought conditions could lead to short-term corrections before the next leg higher. FORECAST Gold’s latest rally implies there is scope for further price rises in the immediate term, provided geopolitical tensions prevail or the Federal Reserve introduces dovish policy measures. A repeated breach above $3,045 could lead to the opening up of higher levels of resistance levels, and it is investor psyche that could bring prices towards the $3,063 levels or higher. Fresh fears over international economic stability as well as the demand for haven assets may yet continue to power bullish sentiment across the gold complex. Even with the aggressive rally, there is still potential for a short-term correction as gold begins to appear somewhat overbought. If the Federal Reserve leans more toward being hawkish or indicates fewer rate reductions than expected, it has the potential to place downward pressure on prices. In that case, gold could fall back towards important support levels at $3,024 or even flirt with the psychological $3,000 threshold. A more pronounced correction can then follow if sentiment in the larger markets turns away from risk aversion.

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Currencies GBP/USD

GBP/USD Resists Below 1.3000 as US Dollar Weakness and Central Bank Prudence Take Hold

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  • March 18, 2025
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The GBP/USD currency pair continues to resist below the 1.3000 level due to a weak US Dollar amidst growing economic risks and prudent central bank expectations. As the pair trades around 1.2970, bears seem to have limited room as the Greenback grapples with weak US retail sales reports and fresh trade tensions. Investors believe the Federal Reserve will leave policy unchanged at the meeting on Wednesday, and similarly, the Bank of England is expected to leave interest rates untouched on Thursday. These moves combined with the BoE’s recent reluctance to try and balance growth worries against inflation worries may support the Pound Sterling further in the short term. KEY LOOKOUTS • Markets broadly expect the Fed to stick with its current interest rate policy, but any hint on future rate direction may influence USD sentiment. • The BoE is expected to keep rates unchanged, with attention on dealing with inflation risks while facing low growth and revised expectations. • Subpar retail sales figures, Trump’s tariff warning, and escalating economic uncertainty are still dragging down the Greenback, constraining its recovery. • The pair is still supported around 1.2970, with minimal downside pressure. A breakout above 1.3000 may indicate additional bullish momentum if USD weakness continues. Traders are keenly observing major economic and policy events this week that may influence the direction of GBP/USD. The Federal Reserve interest rate decision on Wednesday is likely to keep the current stance, but any indication of future monetary policy may influence the US Dollar. In the same vein, the Bank of England’s Thursday meeting is expected to keep rates unchanged, marking a conservative stance against ongoing inflation and decelerating growth. In contrast, the US Dollar continues to struggle with softer-than-expected retail sales figures and escalating trade tensions, capping its potential for recovery. These combined factors collectively favor the Pound, with GBP/USD remaining firm around 1.2970 and targeting a possible breakout above the 1.3000 level. GBP/USD is stable around 1.2970 as the US Dollar falters with soft economic data and trade tensions. Investors look forward to major policy decisions by the Fed and Bank of England that might propel further action. A break above 1.3000 could be an indication of fresh bullish push for the pair. • GBP/USD hovers around 1.2970, backing off but staying strong below the pivotal 1.3000 level. • US Dollar is still susceptible to weakness with poor economic numbers and escalating trade tensions. • February US Retail Sales increased just 0.2%, falling short and sparking concerns over consumer spending. • Markets anticipate the Federal Reserve to leave interest rates steady in Wednesday’s policy meeting. • US Dollar Index (DXY) stands near 103.50 but remains exposed to losses. • Bank of England is also likely to keep rates unchanged on Thursday, underpinning GBP strength. • Pound Sterling can also be further supported by the BoE’s conservative approach in the face of inflation and growth worries. The GBP/USD currency pair is maintaining its ground as market attention turns to pivotal central bank announcements this week. Investors are monitoring closely the policy meeting of the Federal Reserve, where there is no rate change expected, but the focus is still on the tone of the Fed on future economic conditions. Recent US data, specifically weaker retail sales numbers, has worried investors on the strength of consumer spending and the overall economic prospect. In addition, trade policy and global economic stability uncertainties are weighing on the optimism of investors and putting pressure on the US Doller. GBP/USD Daily Price Chart Chart Source: TradingView Meanwhile, the Pound Sterling is being supported by hopes that the Bank of England will stick with its present interest rate policy when it meets later. The central bank is walking a tightrope between containing sticky inflation and responding to easing economic growth. While the UK economy also has its challenges, the prudent policy stance of the BoE is steadying sentiment towards the British Pound. As both central banks take a wait-and-watch stance, the overall market environment remains influenced by economic data and world events. TECHNICAL ANALYSIS GBP/USD is now consolidating just below the psychological 1.3000 level, with 1.2970 serving as the immediate support area. Any prolonged break above 1.3000 might make way for additional bullish follow-through, perhaps heading higher towards broader resistance levels. Conversely, any break beneath 1.2950 could see near-term selling pressure, but overall, the pair remains in a bullish inclination so long as it remains above key moving averages. Traders will be looking for price action at these levels to confirm the next direction. FORECAST If the GBP/USD currency pair is able to hold above the 1.3000 psychological level, it could open the way to more upside momentum. A clean break above this level could lead to buyers driving the pair to the next resistance areas around 1.3050 and 1.3100. Bulls around the Pound, backed by the Bank of England’s firm policy direction and the US Dollar’s weakness, may also continue to propel bullish strength. Any sign of dovishness from the Federal Reserve or further disappointing US economic data could also add more to upward pressure on the pair. To the downside, in the event that GBP/USD cannot resist below the 1.2950–1.2970 support zone, the pair might temporarily retreat. A fall below this level could trigger additional losses to 1.2900 or even 1.2850 in the near term. The US Dollar might regain momentum if the Fed turns more hawkish or if risk appetite declines in international markets. Moreover, any unexpected change in the Bank of England’s expectations or poor UK economic indicators may cap the rally potential and pull the Pound back.

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