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Currencies GBP/USD

GBP/USD Gains as US CPI Data Sustains September Gilt Cut Expectations

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  • August 12, 2025
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GBP/USD rose on Tuesday, trading at 1.3485, as weaker US Dollar sentiment and positive UK labor market data underpinned the pair. The recent US CPI report revealed headline inflation remained at 2.7% YoY in July, and core CPI accelerated to 3.1%, leading markets to increase the likelihood of a Federal Reserve rate cut in September to 94% as per the CME FedWatch Tool. In the UK, high wage growth and an unexpected decline in jobless claims canceled out hints of labor market weakness, further supporting the Pound. Different monetary policy directions between the Bank of England’s dovish easing strategy and increasing Fed dovishness are one of the prime drivers behind the currency pair’s resilience before UK GDP and US jobless claims releases later this week. KEY LOOKOUTS • July CPI remained unchanged at 2.7% YoY, although core CPI increased to 3.1%, lifting September Fed rate cut probabilities to 94%. • Robust wage growth and declining jobless claims supported GBP even with increased unemployment rates. • BoE’s conservative easing stance is the reverse of increasing Fed dovishness, supporting GBP/USD rallies. • UK GDP and US weekly jobless claims will be important for the pair’s near-term direction. GBP/USD accelerated higher on Tuesday, hitting close to 1.3485, as a weaker US Dollar and good UK labor market data supported the pair. The US CPI report in July revealed headline inflation unchanged at 2.7% YoY, with core CPI rising to 3.1%, sending market hopes of a September rate cut by the Federal Reserve to 94%. In Britain, wage growth remained strong and unemployment claims decreased unexpectedly, which balanced fears of high levels of unemployment. The monetary policy divergence—BoE’s cautious loosening compared to the increasing dovishness at the Fed—is still being supported by the Pound, with the public now looking to future UK GDP and US jobless claims for new market directions. GBP/USD reached close to 1.3485 on Tuesday as solid UK wages growth and less bullish US Dollar sentiment supported the pair. US CPI statistics bolstered September Fed rate reduction forecasts, while UK labor market stability underpinned Pound vigor in advance of significant GDP and jobless claims data. • GBP/USD was close to 1.3485, 0.37% higher on Tuesday. • US July CPI remained unchanged at 2.7% YoY; core CPI hit 3.1% from 2.9%. • Market probability of a September Fed rate cut rose to 94% from 84%. • UK pay growth remained firm at 5.0% YoY, as expected. • UK unemployment claims dropped by 6,200 in July, contrary to expectations. •   BoE reduced rates to 4.00% in August but signaled a pace of gradual easing. •  Traders now look to UK GDP and US unemployment claims for new direction. The British Pound rallied against the US Dollar on Tuesday following the issuance of critical economic statistics from both the UK and the US. In the UK, robust wage growth and a surprise fall in jobless claims tempered fears of soaring unemployment. The most recent data revealed that companies created more jobs than initially anticipated, and this has reflected the resistance of the labor market to the subtle signs of losing momentum. Conversely, the US Dollar was pressured by inflation data that reaffirmed hopes for a Federal Reserve interest rate cut in September, and increasing investor confidence in the Pound. GBP/USD DAILY PRICE CHART SOURCE: TradingView The policy divergence between the Federal Reserve and the Bank of England continues to be a key theme for markets. While the BoE recently reduced rates but communicated a measured, gradual path to further easing, the Fed is growing increasingly likely to restart policy easing in the near future. This divergence has served to underpin sentiment for the Pound over recent sessions. Market focus then shifts to tomorrow’s UK GDP report and US jobless claims figures, which may offer additional insight into economic direction and shape investor positioning in the near term. TECHNICAL ANALYSIS GBP/USD is maintaining above the crucial psychological level of 1.3450, and near-term resistance is found around 1.3500, a move above which can pave the way towards the 1.3550 region. The opposite way, first support is at 1.3430, followed by a solid base around 1.3400. Momentum indicators continue to be positive, with RSI still lingering in bullish territory and price action continuing to trade above the 50-period moving average on the 4-hourly, indicating that short-term buying interest is still firm. FORECAST If bulls hold firm, GBP/USD may push through the 1.3500 psychological level, opening the door for a push towards the 1.3550–1.3570 resistance region. Persistent buying interest, underpinned by robust UK GDP data or dovish Fed rhetoric, may even take the pair higher towards 1.3600 in the short term. Favorable risk appetite and continuous policy divergence between the BoE and Fed would also add further fuel to the pair’s appreciation. On the other hand, a fall below 1.3450 might unleash a corrective pullback to 1.3430, with further losses targeting the 1.3400 support. A higher-than-expected US jobless claims figure or comments from Fed officials that are more hawkish might rekindle Dollar demand and cap Pound gains. A fall through 1.3400 would switch short-term direction to a more bearish bias.

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Currencies EUR/USD

EUR/USD Rebound as Dovish Mixed US CPI Keeps September Fed Rate Cut Speculation Alive

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  • August 12, 2025
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The Euro reclaimed its losses against the US Dollar on Tuesday, rising to about 1.1630 and ending a two-day losing streak following mixed US inflation reports. July’s headline CPI increased in accordance with forecasts at 0.2% MoM and 2.7% YoY, while core inflation unexpectedly beat forecasts at 0.3% MoM and 3.1% YoY. Even sturdier core readings, markets still expect a Federal Reserve rate reduction in September, aided by softening overall inflation pressures and a weaker jobs market. In the Euro area, sentiment fell sharply, with Germany’s ZEW Economic Sentiment Index down more than anticipated, although words of ECB policymakers implying that rates are still at a proper level provided some support for the common unit. KEY LOOKOUTS • Headline inflation eased as predicted, but core inflation surprised to the upside, providing a cautionary note for Fed policy. • Markets continue to price in a September rate cut even after the hotter reading of core. • German and Eurozone ZEW Economic Sentiment indicators plummeted, reflecting sustained growth difficulties. • ECB policymakers assert interest rates are at a “very good level,” suggesting policy room during economic uncertainties. Euro made gains against the US Dollar on Tuesday to reach about 1.1630 after conflicting US inflation data cooled recent bearish pressure. Although July’s headline CPI was as forecast and improved marginally on the year figure, core inflation unexpectedly hardened on the upside to show continued pressures. Despite this, investors are still hopeful the Federal Reserve will proceed with a September rate cut, as weaker overall inflation and a slowing labor market leave scope for policy relaxation. In the Eurozone, mood worsened significantly, with Germany’s ZEW survey indicating increased growth concerns, though assurances from ECB officials that the central bank is to stay flexible provided some support to the currency. The Euro surged to near 1.1630 following mixed US CPI data, with markets remaining bullish on a September Fed rate cut even as core inflation was hotter. Sluggish Eurozone sentiment dragged the outlook down, but supportive comments from ECB officials contained the downside pressure. • The Euro surged to near 1.1630, ending a two-day losing trend following mixed US inflation data. •  US July headline CPI was in line with expectations at 0.2% MoM and 2.7% YoY. •  Core CPI was above forecast at 0.3% MoM and 3.1% YoY, reflecting continued price pressures. •  Markets continue to widely anticipate the Federal Reserve to reduce rates in September even as core readings strengthened. •  German ZEW Economic Sentiment Index declined sharply to 34.7 in August from 52.7 in July. •  Sentiment across the Eurozone also declined, reflecting ongoing economic headwinds. •  ECB officials indicated rates are at a “very good level” and stressed flexibility in adapting to evolving conditions. The Euro firmed on Tuesday as uneven US inflation data provided some respite for the currency, aiding it to rebound from recent losses. July’s headline CPI was in line with expectations at 0.2% month-on-month and 2.7% year-on-year, indicating that price growth is slowing in line with expectation. Yet, core inflation, which strips out food and energy, was a touch higher than expected, indicating that underlying price pressures persist. In spite of this, market participants still expect a September Federal Reserve rate cut as decelerating headline inflation and evidence of a softening labor market provide room for policymakers to maneuver. EUR/USD DAILY PRICE CHART SOURCE: TradingView In Europe, the economic sentiment continued to be soft, with the recent ZEW survey indicating a sharp decline in confidence in Germany and the wider Eurozone. The fall underscores continued worries of weak growth and repeated headwinds in the bloc’s biggest economy. However, words from ECB Governing Council member Joachim Nagel, suggesting interest rates are at a “very good level” and the bank has the flexibility to adjust if necessary, gave some comfort. Although there are still uncertainties—most notably over trade tensions—the comments gave some stability to the euro’s outlook. TECHNICAL ANALYSIS EUR/USD bounced back to the 1.1630 area after hitting support close to recent lows, indicating short-term demand. The recovery in the pair keeps it above crucial support levels of 1.1600, while near resistance is located close to 1.1650, followed by the 1.1700 handle. A breakout above these hurdles on a sustained basis may allow further up move, while a fall below 1.1600 may lead to the next support at 1.1570. Momentum indicators are stabilizing, suggesting possible consolidation prior to the next directional shift. FORECAST Short term, EUR/USD may experience modest gains if sentiment continues to support a September rate cut by the Fed. A continued break above the 1.1650 resistance range should set the stage for 1.1700, with more pronounced bullish momentum likely taking it to 1.1750. Encouraging Eurozone news or dovish Fed commentary could propel the rally further. The downside is, however, that if US economic statistics improve or Fed policymakers turn dovish on easing, the pair can expect to see fresh selling pressure. A fall below 1.1600 would bring into focus the 1.1570 and 1.1540 support levels. Poor Eurozone data or increased geopolitical tensions can fuel bearish activity in the sessions to come.

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Currencies EUR/USD

EUR/USD Breaks Above 1.1100 as Softer US CPI and Tariff Halt Fuel Euro Strength

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  • April 10, 2025
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The EUR/USD currency pair broke above 1.1100 after a softer-than-projected U.S. Consumer Price Index (CPI) reading for March and a temporary tariff retreat by President Donald Trump. The euro’s rally intensified in the face of market euphoria over a 90-day suspension of tit-for-tat tariffs, which initially boosted the U.S. dollar but soon gave way to fresh euro strength. Weaker inflation data, with both headline and core readings falling short of expectations, spurred hopes of imminent Fed rate cuts, even though the CME FedWatch tool indicated lower probabilities for a May cut. With volatility continuing to trend higher, EUR/USD continues to move higher, setting its sights on the 1.1200 resistance. KEY LOOKOUTS • EUR/USD is close to the significant resistance zone at 1.1200 that topped rallies in August and September 2024. Breaking above this level would indicate a more bullish continuation. •  On the negative side, the uptrend line around 1.0910 and the 200-day SMA at 1.0735 are crucial supports to look out for on a pullback. •  Market sentiment will likely change following remarks from top Fed officials today, including Lorie Logan, Michelle Bowman, Austan Goolsbee, and Patrick Harker. •  With the odds of a May rate cut declining to 19.5%, there remains a 75.3% chance of a cut in June that keeps rate policy on everyone’s mind and driving EUR/USD direction. The trader must watch closely the 1.1200 resistance level that capped previous EUR/USD rallies and now represents a critical breakout point. To the negative, the uptrend line at 1.0910 and the 200-day SMA level of 1.0735 serve as significant support levels that may cushion a pullback. Market players will also be listening to a string of speeches from various Federal Reserve officials, which may provide new clues to forthcoming monetary policy action. Furthermore, although the chances of a May rate cut have receded, a 75.3% chance of easing in June still dominates investor sentiment and may generate more volatility in the pair. Important resistance for EUR/USD is at 1.1200, while powerful support is at 1.0910 and the 200-day SMA at 1.0735. Speeches by Fed officials and changing rate cut expectations—now in favor of June—are still vital determinants of the pair’s next step. • EUR/USD breaks above 1.1100 following softer-than-anticipated U.S. CPI data. • March CPI reported monthly headline inflation fell by 0.1%, lower than expectations. • Core inflation also slowed down, supporting hopes of a Fed rate cut within the next few months. • 90-day tariff hiatus by President Trump initially supported the dollar but reversed swiftly. • Resistance is at 1.1200, with interim resistance at 1.1146. • The major supports are 1.0910 (trend line) and 1.0735 (200-day SMA). • Fed speakers and June rate cut probabilities (75.3%) will continue to be the key drivers in terms of near-term direction. The EUR/USD currency pair shot above the 1.1100 level following the softer-than-expected U.S. Consumer Price Index (CPI) for March, which fuelled hopes of a more dovish Federal Reserve policy. Both headline and underlying inflation numbers fell short of expectations, with monthly headline inflation even registering a decline of 0.1%. This surprise softness in inflation numbers propelled the euro against the dollar, as investors reevaluated the timing for possible interest rate reductions. Following on the heels of momentum was President Donald Trump’s revelation of a 90-day hiatus on mutual tariffs, which initially buoyed the U.S. dollar before sentiment turned in the euro’s favor. EUR/USD DAILY PRICE CHART CHART SOURCE: TradingView EUR/USD pair is displaying significant bullish momentum as it retakes key psychological levels. Resistance currently stands at 1.1146 and the key hurdle at 1.1200, which sat on top of earlier rallies during 2024. Support in the downside stands at the upward trend line close to 1.0910 and the 200-day Simple Moving Average (SMA) level of 1.0735. Market participants will be listening carefully today to several comments from Federal Reserve officials, along with forthcoming economic statistics, as they look for guidance on whether there will be a rate reduction in June—a prospect currently at 75.3% pricing. All this will probably leave EUR/USD jumpy short term. TECHNICAL ANALYSIS EUR/USD is showing intense buying pressure, recovering the vital 1.1000 point and heading toward the resistance zone at 1.1146, the latest year-to-date high. A persistent breach above this level may create the possibility for a challenge of the pivotal 1.1200 resistance band, which already topped gains in late 2024. Support on the downside comes initially at the rising trend line at around 1.0910, then the 200-day Simple Moving Average (SMA) at 1.0735. If bearish pressure becomes more pronounced, further support comes in at the 1.0667 pivot and the 55-day SMA of 1.0645, which makes these levels important to sustain the existing bullish structure. FORECAST If the bullish momentum is sustained, EUR/USD is set to continue its rally in the near term. A definitive breakout above the 1.1146 resistance would set the stage for the psychologically important 1.1200 level, which served as a robust ceiling during August and September 2024. A strong close above 1.1200 is likely to stimulate additional buying pressure, potentially all the way up to 1.1270 and even 1.1350 in the medium term. Confirmation from softer U.S. inflation data and increasing market conviction in a June Federal Reserve rate cut may continue to boost the euro’s strength versus the dollar. Conversely, if the rally falters or hawkish comments by Federal Reserve officials erode rate cut hopes, EUR/USD may see renewed selling pressure. A fall below the short-term support at 1.0910, indicated by the rising trend line, would represent diminishing bullish pressure. This may induce a deeper decline towards the 200-day SMA at 1.0735. In case bearish momentum strengthens, further intraday targets are the 1.0667 pivot and the 55-day SMA at 1.0645, where the buyers may try to reverse the pair.

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