empty
07.04.2025 03:23 AM
GBP/USD Pair Overview – April 7. The British Pound Delivered a Major Surprise on Friday

This image is no longer relevant

The GBP/USD currency pair rose 280 pips between Wednesday and Thursday, only to crash by 340 on Friday. These kinds of "flights" have become a regular occurrence lately. While the dollar's collapse after Trump's introduction of new, sweeping tariffs can be easily explained, the sharp dollar rally on Friday is more challenging to understand. That said, there were indeed strong drivers behind the dollar's rebound.

First, the Nonfarm Payrolls report showed the creation of 228,000 new jobs, significantly above the 135,000 forecasts. Second, Jerome Powell reiterated on Friday that the U.S. president can impose any tariffs or sanctions — none of that matters to the Federal Reserve. The central bank is only interested in the consequences of those actions: their impact on the economy, inflation, and labor market. Once those effects are clearer, the Fed will respond.

Third, Powell again made it clear that an economic downturn is not the Fed's problem—especially if it's not caused by monetary policy. Let us reiterate: if a recession does hit the U.S., it will be attributed to one man—Donald Trump. No one will think of blaming the Fed. Powell doesn't want to be responsible for the consequences of the president's actions, which most of the world condemns.

To summarize, there were reasons for the dollar rallying on Friday. However, in recent months, market participants have routinely ignored dollar-supportive data. And Powell's Friday message wasn't anything new — he's been repeating for months that the Fed is in no rush to ease monetary policy. We still believe that if inflation in the U.S. continues to rise (which seems highly likely), the Fed might abandon the idea of easing altogether in 2025. The Fed's hawkish tone hasn't mattered to traders recently, so there's little reason to believe it will suddenly spark a significant dollar rally now.

What can we say about the currency market and private traders if Powell sees high economic uncertainty? How can everyday traders predict currency movements if the Fed Chair can't forecast key macro indicators for the coming months?

It's also worth remembering that while Trump pushes his trade agenda, the European Union isn't planning to accept the new trade reality in silence. Retaliatory tariffs on the U.S. may be introduced as soon as next week. Trump, in turn, might respond with tariffs on the retaliatory tariffs. In our view, the global trade war will only escalate further soon. In such a fundamentally political and trade-driven environment, predicting currency movements becomes nearly impossible.

This image is no longer relevant

The average volatility of the GBP/USD pair over the past five trading days is 154 pips, which is considered "high" for this pair. On Monday, April 7, we expect the pair to move from 1.2741 to 1.3049. The long-term regression channel is pointed upward, but the downtrend remains intact on the daily time frame. The CCI indicator entered the overbought zone, signaling a corrective pullback, which has begun swiftly.

Nearest Support Levels:

S1 – 1.2817

S2 – 1.2695

S3 – 1.2573

Nearest Resistance Levels:

R1 – 1.2939

R2 – 1.3062

R3 – 1.3184

Trading Recommendations:

The GBP/USD pair has entered a sharp decline that may evolve into a prolonged correction — at the very least, a correction. We still do not consider long positions valid at this stage, as the current upward movement looks like a disjointed correction on the daily time frame. However, if you trade purely on technical signals, long positions remain relevant with a target of 1.3184, provided the price holds above the moving average. The pound could continue to rise if Trump keeps imposing tariffs and other countries introduce retaliatory measures. Short positions remain attractive with targets at 1.2207 and 1.2146 because the upward correction on the daily chart will eventually end — unless the broader downtrend ends first. Even if we are witnessing the beginning of a new uptrend, a downward correction is needed, as the pound has risen far too sharply in recent weeks.

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 InstaForex
© 2007-2025
Summary
Urgency
Analytic
Stanislav Polyanskiy
Start trade
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

EUR/JPY. Analysis and Forecast

Today, the EUR/JPY pair attracts new sellers after rising in the Asian session to nearly the round level of 174.00, and is now breaking through 173.00, extending the decline from

Irina Yanina 11:41 2025-10-01 UTC+2

How the Shutdown Will Affect the Fed's Plans

Traders are lowering their expectations regarding how much the Federal Reserve will cut interest rates in the coming months, illustrating how mixed signals from central bank officials are clouding

Jakub Novak 10:52 2025-10-01 UTC+2

The Shutdown Is Happening

Yesterday, the U.S. Congress missed the midnight deadline for funding submissions, which led to the first government shutdown in nearly seven years — and the third under President Donald Trump

Jakub Novak 10:46 2025-10-01 UTC+2

The Market Faces a Reality Check

No matter how challenging the current U.S. government shutdown may seem, these disruptions are temporary. This fact, combined with positive news from pharmaceutical companies, has pushed the S&P 500 back

Marek Petkovich 09:15 2025-10-01 UTC+2

What to Pay Attention to on October 1? A Breakdown of Fundamental Events for Beginners

Several macroeconomic reports are scheduled for release on Wednesday. The most important among them are the U.S. ISM Manufacturing PMI and euro area inflation. It's worth noting that although inflation

Paolo Greco 07:38 2025-10-01 UTC+2

GBP/USD Overview – October 1. Shutdown Doesn't Bother the Dollar

On Tuesday, the GBP/USD currency pair traded with minimal volatility once again. The looming threat of a U.S. government shutdown had virtually no impact on trader sentiment — but that

Paolo Greco 04:44 2025-10-01 UTC+2

EUR/USD Overview – October 1. Soon, Not Only Migrants Will Be Leaving America...

The EUR/USD currency pair once again traded calmly on the second trading day of the week. While there was a minor intraday upward bias on Monday, it remained weak, accompanied

Paolo Greco 04:44 2025-10-01 UTC+2

USD/JPY: Price Analysis and Forecast

The Japanese yen continues to gain intraday strength. Despite mixed views expressed by the Bank of Japan (BoJ) in its recently released Summary of Opinions, investors appear convinced that

Irina Yanina 00:20 2025-10-01 UTC+2

October 1 – The Great Day of the Great Shutdown. Part 3

How will the dollar react to the shutdown? So far, the market isn't jumping the gun—it's not rushing ahead of the train. However, economists have reviewed historical price data

Chin Zhao 00:20 2025-10-01 UTC+2

October 1 – The Great Day of the Great Shutdown. Part 2

Since everything Trump does is "Great," the shutdown will likely be Great as well — albeit with a negative side. This time, Trump has decided not to simply send federal

Chin Zhao 00:20 2025-10-01 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

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 InstaForex anyway.

We are sorry for any inconvenience caused by this message.