GBP/USD Price Analysis – April 28, 2025
Daily Price Outlook
During the European session on Monday, the GBP/USD currency pair extended its upward momentum, reaching near 1.3350.
The rally continued as the US Dollar (USD) traded cautiously amidst ongoing uncertainty surrounding US-China trade talks and the anticipation of crucial US economic data later in the week.
Market participants adopted a wait-and-see approach, awaiting clearer signals from the US-China discussions, with no definitive signs of active talks between the two leaders.
US Dollar’s Caution amid Trade Deal Uncertainty
On the US front, the broad-based US Dollar remained subdued as investors awaited more clarity on the status of US-China trade talks. On Monday, China denied reports that President Xi Jinping had spoken directly with US President Donald Trump about trade terms.
This denial came after Trump suggested that Xi had reached out to him, but he didn't provide any clear details about their conversation. As a result, investors are hesitant to make big moves, waiting for more updates on whether a trade deal is possible.
In addition to the trade-related uncertainty, the US Dollar Index (DXY), which measures the Greenback’s performance against six major currencies, hovered around the 99.50 level. This cautious tone in the USD kept the Pound supported, as traders refrained from making bold moves until clearer economic signals emerged.
Focus on US Economic Data and Fed Policy Outlook
Investors are also awaiting a slew of economic data from the US this week, with attention focused on employment, Gross Domestic Product (GDP), and inflation reports. These releases are crucial for shaping market expectations regarding the Federal Reserve’s (Fed) future monetary policy.
According to the CME FedWatch Tool, market participants widely anticipate that the Fed will hold interest rates steady in its upcoming meeting on May 6-7, with the current rate range of 4.25%-4.50% expected to remain unchanged.
However, Fed officials have suggested that any future policy changes will depend on clearer signals about the state of the economy.
Pound Outperforms Despite Dovish UK Economic Outlook and Rate Cut Expectations
Despite a generally dovish outlook for the UK economy, the Pound outperformed its peers early in the week.
Market participants continue to price in expectations that the Bank of England (BoE) will cut interest rates by 25 basis points to 4.25% in its policy meeting on May 8.
These dovish bets were driven by concerns over the potential negative impact of US tariffs on the UK economy and subsiding inflation pressures in the UK.
Moreover, BoE Governor Andrew Bailey has acknowledged that global trade tensions, especially the US-China trade dispute, could hurt UK growth, but he has ruled out the chance of a recession soon.
BoE policymaker Megan Greene also raised concerns about weak productivity and risks to the UK labor market, as employers face higher social security costs.
These factors, along with expectations of a potential rate cut, have helped keep the Pound strong against the Dollar.
GBP/USD – Technical Analysis
The GBP/USD pair is displaying early signs of bullish momentum after breaking above a key symmetrical triangle pattern.
The entry trigger near $1.3306 aligns with the breakout of a consolidation structure, suggesting a measured move toward the $1.3348 resistance zone. A bullish breakout from the triangle is often indicative of renewed trend continuation.
Technically, the 50-period EMA, currently at $1.3307, is flattening and attempting to turn higher, providing dynamic support beneath current prices.
The RSI reading at 54.10, edging above the 50 midline, confirms a strengthening bias without approaching overbought levels, leaving room for further upside.
Candle structures around the breakout reveal a mild bullish engulfing pattern followed by a spinning top, reflecting healthy consolidation post-breakout without signs of exhaustion.
No bearish divergence is detected on the RSI, reinforcing the likelihood of continued gains if immediate resistance is breached.
A move above $1.3348 could trigger additional buying, possibly exposing $1.3385 next. Conversely, failure to sustain above the breakout could see a pullback toward $1.3277, which remains key short-term support.
Pattern traders will note the “ABCD harmonic pattern” formation within the broader triangle structure, reinforcing the measured move thesis toward higher resistance levels.
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