- The GBP/USD forecast indicates resilience in the pound.
- Trump announced a new 25% tariff on steel and aluminum imports.
- Traders are waiting for the US CPI report to provide more clues on future Fed rate cuts.
The GBP/USD forecast indicates resilience in the UK currency as Britain remains one of the least vulnerable economies to Trump’s tariffs. However, market participants remained cautious ahead of US inflation figures and UK GDP data.
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At the start of the week, Trump announced a new 25% tariff on steel and aluminum imports that will affect several major economies. However, the market reaction was subdued. Previous tariff threats have caused market turmoil, plunging the currencies of the countries involved, such as the Canadian dollar. Meanwhile, the pound remains safe as none of Trump’s recent tariffs have directly impacted the UK economy. Nevertheless, the US president has mentioned a reciprocal tariff on all imports to the US.
Meanwhile, the dollar eased on Tuesday as markets shifted their focus from tariffs to the US economy and monetary policy. Powell’s speech on Tuesday had little surprises as the Fed Chair maintained his cautious tone. He emphasized that there was no hurry to lower borrowing costs. Traders will now wait for the US CPI report for more clues on future rate cuts.
Meanwhile, the UK will release its GDP report on Thursday. Economists believe it will be another downbeat figure as the slowdown in the economy continues.
GBP/USD key events today
- US core CPI m/m
- US CPI m/m
- US CPI y/y
- Fed Chair Powell Testifies
GBP/USD technical forecast: Bulls set sights on the 1.2550 resistance
On the technical side, the GBP/USD price has broken above the 30-SMA after failing to sustain a move below the 1.2400 key level. Above the SMA, with the RSI above 50, the price has a bullish bias and will likely soon climb to retest the 1.2550 resistance level.
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However, bulls have come near this resistance level three times and failed to continue higher. The first time the price neared the level, it reversed and broke below the 30-SMA. The second time, it did the same.
In this third attempt, if bulls fail to break above 1.2550, bears might take charge and reverse the trend entirely. This would allow GBP/USD to reach prices below 1.2251. On the other hand, if bulls gain enough momentum to breach the resistance, the bullish trend will continue higher.
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