empty
23.04.2025 04:56 AM
GBP/USD Overview – April 23: The British Pound Can't Stop Smiling

This image is no longer relevant

On Tuesday, the GBP/USD currency pair traded much more calmly, yet again showed signs of a "maxed-out flat" pattern. As previously noted, the US dollar has only had two behaviors lately: it falls or remains flat. The option of growth simply doesn't exist. And as we've repeatedly stated, the sole reason is Donald Trump's new trade policy. However, this factor alone could negatively affect the US economy...

For instance, many now believe that a recession is inevitable. Even the Fed couldn't trigger a recession with its ultra-high interest rates. Donald Trump, however, has proven within the first three months of his second term that nothing is impossible when you try hard enough. Currently, nearly all market participants expect a recession, but they blame Trump personally and take out their frustration with the dollar. A trade war will affect more than just the US; other countries aren't seen as the instigators. We're increasingly convinced that the fall in the US stock market and the dollar is a protest by market participants against the policies of the new-old president.

There are also questions surrounding the Fed's monetary policy. As a reminder, the European Central Bank has already cut rates seven consecutive times, unlike the Fed, which stubbornly remains on pause. Yet, this hasn't affected the euro's exchange rate at all. If a hawkish Fed and a dovish ECB can't trigger a drop in EUR/USD, imagine what will happen if the Fed starts cutting rates too.

The same logic applies to the Bank of England and the British pound. The BoE is slightly more hawkish than the ECB, but the principle is the same—what happens to the dollar if the Fed joins the rate-cutting crowd? We're skeptical because Jerome Powell keeps emphasizing that the Fed's dual mandate is price stability and full employment. However, achieving full employment is impossible in a recession. That creates a tricky dilemma: tariffs may cause inflation to rise, meaning the Fed can't cut rates; simultaneously, a shrinking economy and weakening labor market would demand lower rates. What the Fed decides to do in this scenario remains a mystery.

As for the British pound—it doesn't have to do anything to continue rising. In the past, before Trump, it required strong macroeconomic data from the UK, a hawkish BoE, and political stability. Now, none of that matters. As a result, the pound could continue to rise indefinitely—at least until the global trade war de-escalates. Where the dollar or the US economy will be by that point is anyone's guess. Long-term and even medium-term forecasts are practically meaningless right now.

This image is no longer relevant

The average volatility of GBP/USD over the last five trading days is 82 pips, which is considered "average" for the GBP/USD pair. Therefore, on Wednesday, April 23, we expect the pair to move between 1.3286 and 1.3450. The long-term regression channel points upward, signaling a clear bullish trend. The CCI indicator has again entered the overbought zone, but during strong uptrends, these signals typically only imply a correction.

Nearest Support Levels:

S1 – 1.3306

S2 – 1.3184

S3 – 1.3062

Nearest Resistance Levels:

R1 – 1.3428

R2 – 1.3550

R3 – 1.3672

Trading Recommendations:

The GBP/USD pair continues to move confidently upward. We still believe that this is merely a correction on the daily time frame that has become irrational. However, if you trade based on pure technicals or "on Trump," long positions remain relevant with targets at 1.3450 and 1.3550, as the price is trading above the moving average. Especially considering that the pound continues to rise almost daily without an apparent reason. Sell orders are still attractive, with targets at 1.2207 and 1.2146, but at the moment, the market isn't even considering buying the dollar—while Trump regularly triggers fresh sell-offs of the US currency.

Explanation of Illustrations:

Linear Regression Channels help determine the current trend. If both channels are aligned, it indicates a strong trend.

Moving Average Line (settings: 20,0, smoothed) defines the short-term trend and guides the trading direction.

Murray Levels act as target levels for movements and corrections.

Volatility Levels (red lines) represent the likely price range for the pair over the next 24 hours based on current volatility readings.

CCI Indicator: If it enters the oversold region (below -250) or overbought region (above +250), it signals an impending trend reversal in the opposite direction.

Paolo Greco,
Analytical expert of InstaTrade
© 2007-2025

Recommended Stories

Opposition to Trump Within the U.S. Intensifies (Potential for Continued Growth in #SPX and #NDX)

Domestic opposition to Donald Trump is gaining momentum, which could be an unpleasant surprise for the former president. This development may limit his efforts to reshape the U.S. economic landscape

Pati Gani 09:49 2025-05-29 UTC+2

What to Pay Attention to on May 29? A Breakdown of Fundamental Events for Beginners

Very few macroeconomic reports are scheduled for Thursday. The macroeconomic event calendars for Germany, the United Kingdom, and the Eurozone are empty. Only the United States will release reports

Paolo Greco 06:58 2025-05-29 UTC+2

GBP/USD Overview – May 29: The Dollar Begins to Believe in Miracles

On Wednesday, the GBP/USD currency pair traded with a slight decline, but it's hard to believe in further strengthening the U.S. dollar under the current circumstances. On the one hand

Paolo Greco 03:32 2025-05-29 UTC+2

EUR/USD Overview – May 29: Laughable or Lamentable? Trump Promises a Deal Again

The EUR/USD currency pair did not perform as well for the dollar on Wednesday as it did during the previous two days. However, even Monday and Tuesday can hardly

Paolo Greco 03:32 2025-05-29 UTC+2

NZD/USD. Hawkish Rate Cut: The Reserve Bank of New Zealand Concludes Its May Meeting

As expected, the Reserve Bank of New Zealand (RBNZ) lowered the interest rate by 25 basis points to 3.25% following its May meeting. This marks the sixth round of monetary

Irina Manzenko 00:31 2025-05-29 UTC+2

The Yen Saws Off the Branch Under the Dollar

When you begin dismantling a system, you risk cutting off the branch you are sitting on. For decades, the United States' main trading partners earned money by exporting goods

Marek Petkovich 00:30 2025-05-29 UTC+2

The Euro Is Rushing Things

After a rapid rally from February through April, EUR/USD entered a prolonged consolidation phase. For several weeks now, the major currency pair has remained locked within the 1.1100–1.1400 trading range

Marek Petkovich 18:43 2025-05-28 UTC+2

USD/CAD. Analysis and Forecast

The USD/CAD pair has been recovering for the third consecutive day from this year's lowest level, supported by renewed buying interest in the U.S. dollar. Yesterday's optimistic U.S. economic data

Irina Yanina 11:44 2025-05-28 UTC+2

DXY: U.S. Dollar Index Continues to Show Positive Momentum for the Second Day in a Row

On Wednesday, the U.S. Dollar Index (DXY) continued its upward momentum for the second consecutive day, rebounding from the monthly low reached earlier this week. The index rose

Irina Yanina 11:36 2025-05-28 UTC+2

Why Are Currencies Traded Against the Dollar Not Declining? (There Is a Chance EUR/USD May Resume Growth and USD/JPY May Fall)

We are truly living in an unusual time, where the classic principles of assessing market situations are being cast aside in favor of more pressing and, more importantly, unclear

Pati Gani 10:05 2025-05-28 UTC+2
Can't speak right now?
Ask your question in the chat.
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaTrade anyway.

We are sorry for any inconvenience caused by this message.