- Market implies 2.32 rate cuts in the US (32% chance of third rate cut at the end of 2025 in the US)
- RSI is currently at 55,5, while MACD is at 0.00356
- On the 8th of May a trade deal between UK and USA was signed
Recommendation:
- Transaction: Short position on GBPUSD at market price
- Target: 1.31468
- Stop: 1.34638
Opinion:
The GBPUSD presents a compelling short opportunity with converging technical and fundamental signals pointing to downside pressure. With RSI at 55.5 showing bearish divergence and MACD at 0.00356 on the verge of a bearish crossover, momentum indicators are signaling a potential reversal. The recent US-China trade deal announced May 12th has significantly shifted market sentiment, with the temporary reduction of US tariffs on Chinese goods from 145% to 30% and Chinese tariffs on US goods from 125% to 10% creating a favorable environment for USD strength.
Technically, price action shows GBPUSD rejecting from a key supply zone while respecting a descending trendline, confirming bearish bias. The monetary policy divergence between the Fed (cautious amid strong US growth) and the BoE further supports USD strength against GBP. With market implying 2.32 rate cuts in the US (32% chance of a third cut by year-end), the pair looks positioned to decline despite the recent UK-US trade deal signed on May 8th.
The risk-reward setup is particularly attractive as the stop loss is positioned above recent highs at 1.34638, while the take profit target at 1.31468 coincides with the 23.6% Fibonacci retracement and 50-day SMA, offering multiple layers of technical confirmation for this short opportunity.
