GBP/USD Trading forecasts and signals - page 2

The pound is showing a moderate recovery, supported mainly by external factors. The key catalyst was the Trump administration's decision to postpone the introduction of increased tariffs for 75 countries for 90 days, while maintaining the base rate of 10% for them. The exception was China, which will be subject to maximum restrictions of 125%. This decision somewhat reduced the tension in the debt markets, allowing yields to retreat from recent highs.The change in US trade rhetoric has significantly affected expectations regarding the Bank of England's policy. Before the tariffs were introduced, the probability of a rate cut in May was estimated at only 10%, but now half of analysts predict an easing by 50 basis points. Such expectations are formed against the background of growing uncertainty and changing behavior of institutional investors.Of particular concern is the dramatic change in forex hedging strategy. Large hedge funds are massively switching to gold, ignoring other assets. The volume of borrowed funds allocated for such investments increased from 4 to 61 billion pounds in just a month, which creates additional liquidity risks in the market. Claire Lombardelli, Deputy Governor of the Bank of England, noted that the US trade policy will certainly put pressure on economic growth, but its impact on inflation is still difficult to assess.The dollar index sank, retreating from yesterday's high of 103.00 to 102.30. According to Finance Minister Bessent, the original purpose of the trade restrictions was to stimulate negotiations, but an unexpectedly strong market reaction forced the administration to reconsider the timing of the measures.The technical picture of the GBP/USD pair shows a correction within the ascending channel of 1.2800-1.3220. The indicators show a weakening of the bullish signal - the moving averages on the Alligator have leveled off, and the Awesome Oscillator histogram forms corrective bars in the negative zone.Purchases will be relevant if the pair is consolidated above 1.2900 with the prospect of moving towards 1.3100. The protective stop loss is set at 1.2800.Selling is advisable when breaking 1.2800 down with a target of 1.2580. We will set the security order at ...

USA: inflation and government bonds in the spotlightThe focus of the American market today is the publication of the March consumer price index (CPI). Inflation is expected to slow down: according to the consensus forecast, the overall indicator will decrease from 2.8% to 2.5% in annual terms, and the core CPI index from 3.1% to 3.0%. Despite the increase in tariffs, which reinforces inflation expectations for the medium term, the Federal Reserve's attention is focused on internal, "organic" price pressures. An additional indicator of current investor sentiment will be the auction for the placement of 30-year US Treasury bonds.Sweden: signs of economic recoveryToday, at 08:00 Central European time, data on GDP, production and consumption for February will be published. Given that there has already been an increase in retail sales and the total number of hours worked, there is a possibility of positive dynamics in other segments of the economy. In addition, a speech by a representative of the Riksbank of the Seimas on monetary policy issues will be held at 09:00.Norway: inflation remains at the center of controversyThe inflation data for March will be key for the Norwegian market. In February, consumer prices unexpectedly jumped, helped by rising prices for groceries, air travel, and catering services. The main question now is whether this is a sustainable trend or a temporary effect. We tend to believe that most of the growth will be irreversible, but at the same time, the monthly inflation rate will begin to slow down. The forecast for the core CPI is 3.3% in annual terms, which, by historical standards, is rather in the lower range, especially after the strong February report.Denmark: inflation and unemploymentThe March consumer price index in Denmark is expected to be published today. According to forecasts, inflation will slow down from 2.0% to 1.7%, which will be facilitated by lower prices for electricity and fuel. There will also be data on the unemployment rate, which may affect short-term expectations for the krona. Additional context can be found in the "Reading the Markets Denmark" analysis from April 9th.China: inflation is stabilizingConsumer inflation in China in March was slightly below expectations, at -0.1% year-on-year and -0.4% month-on-month. Despite this, the indicator improved significantly compared to February (-0.7% YoY), which indicates the first signs of the effectiveness of the incentive measures taken by the authorities.Energy market: correction after sharp growthOil prices fell by about 1% after Donald Trump's announcement about tightening tariff policy towards China. Despite this, the main benchmark oil grades ended the previous session with an increase of 4%, recovering some of the sharp drop at the beginning of the day. Brent futures are currently trading in the range of 64-65 dollars per barrel.Global Trade: a sharp turnaround by the United StatesThe day before, the US administration announced a 90-day suspension of new duties on most countries in order to create conditions for negotiations. However, tariffs on Chinese goods were increased to 125%. Notably, this decision does not apply to Canada and Mexico. In response, China announced a 50% increase in duties on American goods, bringing the total tariff to 84%. Despite the escalation, the market has begun to reconsider the probability of a recession in the United States — now it is estimated at less than 50% compared to almost 70% previously.USA: Fed is concerned about inflation amid economic slowdownThe minutes of the FOMC meeting showed that the regulator is concerned about rising inflation with a slowdown in business activity and the labor market. The participants noted the difficulty of choosing between supporting economic growth and the need to curb price pressures. Later, Fed spokesman Thomas Barkin emphasized the importance of consumer spending as one of the sustainable elements of the economy at the current stage.The Eurozone: a response to US tariffsThe EU Council voted to impose duties of up to 25% on American goods worth a total of 21 billion euros, including soybeans and motorcycles. This was a response to the US tariffs on steel and aluminum. The Commission hopes to conclude a deal with the United States on the mutual zeroing of duties and an increase in purchases of American energy, but the likelihood of this remains uncertain.Stock markets: violent rebound after panicAfter a series of sales, the US market showed impressive growth: the S&P 500 index jumped by 10%, showing the best result since October 2008. Particularly strong growth was recorded in the technology sector: shares of Tesla, Apple and Nvidia increased by 20%. There is also a positive trend in Asian markets: Nikkei gained 8%, Kospi — 6%, and Chinese indices remain in the black by 2%. European futures are also signaling an opening with an increase of about 7%.Currencies and bonds: the market is adapting to new conditionsThe US decision to suspend tariffs has caused a surge of optimism: yields on short-term US bonds have increased, and the 2s10s curve has significantly tightened. The Fed's rate forecast for the end of the year has been revised up by 20 basis points. The dollar index remained stable, while the euro weakened against the dollar. Emerging market currencies gained support, while defensive assets such as the franc and the yen suffered ...

USA: new tariffs, market reaction and the Fed's positionThe Trump administration's mirror tariffs have been in effect in the United States since this morning. The main focus is on the countries with the largest trade deficit with the United States. China has been hit with an unprecedented 104% tariff, the culmination of an escalated trade war between the two powers. The media is actively discussing potential retaliatory measures from China, including a weakening of the yuan and a possible sale of American assets.President Trump announced the readiness of many countries for trade agreements last night and expressed confidence in reaching a deal with China. However, he also made it clear that the tariff measures may not end there — duties on pharmaceutical imports are expected.Today, special attention will be focused on the speech of Fed Member Barkin and the publication of the minutes of the last FOMC meeting. The document may shed light on discussions about the Fed's reaction function and the state of dollar liquidity. Against the background of tightening financial conditions, the regulator is likely to take a wait-and-see attitude, preferring verbal interventions to lower the rate. Nevertheless, market expectations signal almost five rate cuts of 25 basis points over the course of the year, with the probability of the first cut in May estimated at 50%.The US debt market has seen a significant increase in yields on long—term bonds - plus 20 basis points per day. This happens despite a decrease in the quotations of risky assets and indicates a likely revaluation of the premium over the term. Among the possible reasons are rumors about the sale of Treasuries from China, the reduction of hedge fund positions and weak demand at the auction of 3-year bonds. Today, the placement of 10-year securities will take place, and its results will give an idea of the real demand for long-term obligations in the new conditions.Europe: tariff confrontation with the United States and the ECB's positionA vote is expected in the eurozone today on the initiative of the European Commission to impose retaliatory tariffs of up to 21 billion euros on American imports. This could provoke an even more aggressive reaction from Washington and increase tensions in global trade.Representatives of the ECB are also speaking on the current agenda. Judging by the rhetoric, the governing council agrees that a tightening of U.S. trade policy could seriously undermine global demand. The question remains to what extent the "hawkish" part of the ECB still sees the inflation risks associated with tariffs.Yesterday, the representative of the ECB from Germany, Nagel, said that Washington's change of course "significantly worsens global prospects." At the same time, Simkus, who takes a more moderate position, noted the need to reduce the rate by 25 bps next week, but abandoned the forecast for June.China and inflation dataChina is preparing to publish data on the consumer price index. These data will be important both for assessing domestic demand and for understanding the extent to which the current trade confrontation with the United States is affecting the economy.Oceania and the commodity market: falling rates and oilThe Reserve Bank of New Zealand has lowered its key interest rate to 3.50% from 3.75%, confirming a soft monetary policy course amid global uncertainty.Oil prices have plummeted — Brent is trading in the range of 60-61 dollars per barrel, which is the lowest in the last four years. This is due to concerns about a slowdown in the Chinese economy and a general decrease in risk appetite.Sweden, Denmark and the real estate marketIn Sweden, house prices remained unchanged in March after two months of decline. This reflects household pessimism, which has begun to show up in the evidence. The decline in activity in the real estate market may intensify in the coming months, but expectations of lower rates may partially offset the negative sentiment.In Denmark, industrial production increased by 5.1% in February, reversing the decline in January. However, volumes are still lower on a three-month basis, partly due to instability in the pharmaceutical sector.Geopolitics: China, Ukraine and the USAThe head of the US Treasury Department, Vincent, sharply criticized China's retaliatory measures in the trade conflict, calling them a "serious mistake." At the Senate hearing, USTR representative Greer confirmed that there would be no exceptions to the new global tariffs, but stressed that tariffs on Chinese vessels in U.S. ports would not necessarily be cumulative.In Ukraine, President Zelensky announced the detention of two Chinese citizens who fought on the side of Russia. This has caused concern in Washington, and Kiev is demanding explanations from Beijing and the United States.Financial markets: high volatility and reduced risk appetiteStock markets continued to decline: the S&P 500 index lost 1.6%, having already fallen by 19% from its February highs. Despite attempts at a rebound, Trump's rhetoric and uncertainty about China are weighing on investor sentiment. The rise in bond yields came as a surprise, causing declines in the real estate and consumer goods sectors. At the same time, banks, industry and the utilities sector were among the rare winners, which indicates the unwillingness of investors to take on additional risks.Futures on the Asian and European markets opened lower today. The Nikkei 225 lost up to 4% after yesterday's rally, while the mood in China is more subdued — Hang Seng is down 1.6%, and Shenzhen is even up 0.6%.Currencies and yields: pressure remainsThe dollar index DXY decreased by 1% per day, EUR/USD broke through the 1.10 level again, and EUR/CHF fell below 0.93 amid deteriorating sentiment. The EUR/NOK pair reached above 12 due to the fall in oil prices. Yields on long-term U.S. Treasuries rose amid the risk-off, despite the weakness of the stock ...

USA: small business and trade policy under the gunToday, the attention of market participants in the United States is focused on the publication of the NFIB Small Business Optimism index. This indicator is traditionally considered a leading signal for the state of the domestic economy, especially in the context of consumer demand and entrepreneurs' confidence in the sustainability of macroeconomic conditions. In addition to statistics, investors are closely monitoring possible signals of a softening of the Trump administration's rhetoric on trade issues, as well as potential comments from Fed officials amid rising volatility in currency pairs and stock market assets.Denmark: industrial production under pressureDenmark publishes industrial production data for February. The January indicator showed a record decline of 11.9% seasonally adjusted, which is considered an extreme value even by the standards of the volatile Danish sector. Despite the lack of a clear explanation for the reasons for such a sharp drop, this should not yet be considered as a sign of a systemic weakening of the country's industrial sector. It is expected that the February statistics will help clarify whether the decline was a one-time effect or a signal of a deeper correction.ECB: the market is waiting for hints on policySeveral representatives of the European Central Bank are also speaking today. Against the background of tightening financial conditions, investors will closely analyze the rhetoric of officials for potential changes in the trajectory of interest rates or the level of caution when making new decisions. Any hints of a reassessment of the current monetary strategy may cause a strong reaction in the bond and currency markets.Geopolitics and trade disputes: growing tensionPresident Trump confirmed plans for direct talks with Iran on the nuclear program, but warned of possible "serious consequences" if the dialogue fails. Iran is currently rejecting this format. At the same time, China expressed its determination to introduce new retaliatory measures if the United States implements the threat of a 50% tariff increase. The Ministry of Commerce of the People's Republic of China declared its full readiness to "fight to the end," which indicates a serious escalation of the conflict.Market reaction: rumors, volatility, and risk reassessmentYesterday, rumors of a possible 90-day tariff suspension led to a violent intraday rally in the US stock market, although they were later denied by the White House. Despite this, the very fact of the market's reaction demonstrates how sensitive investors are to any sign of a de-escalation of the trade conflict. In turn, the new threat of tariffs from Trump has again caused a wave of concern. The Sentix Eurozone business confidence index dropped sharply from -2.9 to -19.5, reaching its lowest level since October 2023.Scandinavia: budget deficit and fiscal incentivesIn Sweden, the preliminary budget data for March coincided with forecasts, but the cumulative deviation in borrowing amounts to 4.8 billion Swedish kronor. In May, a review of the volume of government bond placements is expected, taking into account new budget incentives, including an increase in defense spending. This creates the prerequisites for an increase in supply on the government debt market.The EU and trade strategy: protecting interests without escalationThe European Commission has proposed a zero-for-zero mechanism for tariffs on manufactured goods as an attempt to avoid a full-scale trade war with the United States. In case of failure of negotiations, the EU is ready to apply retaliatory duties from April 15 to December 1 on a number of American goods. Alcoholic products, including bourbon and wine, were excluded from the list after pressure from individual EU countries. Voting on the list will take place on Wednesday.Stock markets: instability persistsYesterday, the European and Scandinavian markets showed sharp intraday fluctuations: first, growth based on rumors, then a sharp drop after their refutation. The total losses amounted to about 5%, the Stoxx 600 is in the correction zone with a peak drop of -16%. Investors exited all assets, including defensive ones such as telecoms and gold. Against the background of capitulation, expectations in the futures market point to a possible technical rebound of 2%.The American markets proved to be more stable. The S&P 500 index closed with a minimal decline of 0.2%, despite an initial drop of 5%. Investors switched to trading amid rising yields: the real estate and utilities sectors declined, while cyclical securities showed a recovery. In the morning, futures on American indices are up 1-2%.Currency and debt market: yields are rising, the dollar is strengtheningUS bond yields rose sharply: the US Treasury curve shifted upward, and ten-year securities added almost 20 basis points. The DXY dollar index strengthened by 0.5%, while traditional defensive currencies such as the yen weakened slightly. EUR/NOK rose 1.5%, while EUR/DKK reached its highest level since 2020. Brent is trading near USD 65 per barrel. Asian indexes started the day with gains: the Nikkei 225 rose by 6%, while Chinese and Korean markets were also up by 1-2%.The overall market picture remains tense, but the reaction of participants indicates a willingness to receive positive news. In the coming days, the White House's rhetoric on trade issues and its impact on global risk assessment will remain a key ...

The foreign exchange market is better known as Forex or FX. Trading in this market has become very popular in recent years. However, this is not the case - Forex trading raises a number of questions. For example: what is the foreign exchange market? Which currency pairs are best to trade? Is currency trading risky? Some of the answers to these questions will be found in this article.What is the Forex market?The foreign exchange market is also called the Forex market or the English foreign exchange market. It is simply a market where currencies are exchanged. According to the Bank for International Settlements (BIS), the foreign exchange market is the largest market in terms of total volume, with up to USD 5 trillion traded daily. It is not a physical place, but rather an electronic network where institutions or individuals trade with each other.The left-hand currency is called the base currency and the right-hand currency is called the quote currency. The second currency indicates the value relative to 1 unit of the base currency. For instance, the formula EUR/USD = 1.4000 implies that EUR/USD trades at 1.4000, i.e., 1 Euro has a value of $1.40. The first currency is always expressed in the second currency. USD/JPY at 110.50 means that one USD is worth JPY 110.50. EUR/USDWhat are the best currency pairs to trade?The best currency pairs to trade effectively depend on your trading style. If you have a short term strategy, for example, if you like to scalp, then the major currency pairs will be most profitable for you because of the low spreads.On the other hand, for a fundamental trader, smaller currency pairs will be of interest based on long-term analysis. The most profitable currency pairs may be those involving the Australian dollar, Japanese yen or Canadian dollar.The best forex currency pairs:EUR/USD: this pair has the lowest spread and is not very volatile.GBP/USD: this pair is interesting in terms of spreads and possible gaps, but it is quite volatile.USD/JPY: this pair has low spreads and offers some interesting possibilities. GBP/USDHow to get started trading currencies online?To start trading currencies online, follow these steps:- Choose a regulated and reputable broker- Choose a broker by the quality of execution of trading instructions- Decide on the trading style that suits you best (scalping, intraday trading, swing trading - you keep your position open for several days)- Determine the appropriate leverage effect in the stock market according to your strategy and experience.- Do not invest more than you can afford to lose.- Choose an intuitive, simple and secure trading platform such as MetaTrader 4.- Try all the above steps on a demo account, before trading live.Read more: Features of intraday trading on the Forex marketGoldIs online currency trading dangerous?Like any financial investment, currency trading online is subject to risks. However, there are different methods to control these risks:- Determine the price of the currency pair at which you want to close a position if developments are unfavourable (for example, if you buy and the price falls, or if you sell and the price rises),- Determine the size of the trade so that your potential loss should not exceed 2-3% of your capital per trade,- Estimate your risk/return ratio (loss/profit) before you open the trade. By default you should have a greater potential for profit than loss, e.g. risk 50 pips, but try to make a profit of e.g. 100 pips.For proper money management and risk reduction it is advisable to start trading on a demo account and try things out on the dirt first. Such an account will allow you to trade in real market conditions, but with fictitious capital, so that you have a complete understanding of the foreign exchange market without any risk.Read more: Forex broker: how to choose a good ...