empty
18.04.2025 03:48 AM
GBP/USD Overview – April 18. Powell's Speech: Nothing Positive for the Dollar

This image is no longer relevant

The GBP/USD currency pair continued to trade relatively calmly on Thursday, showing only a minimal downward bias. We still can't classify the current movement as a "pullback" or "correction." The chart below clearly shows how rapidly volatility is decreasing, yet the market is in no hurry to close longs or open shorts. There are still no grounds for opening short positions, as the market continues to respond only to the trade war initiated by the U.S. against the rest of the world. All other macroeconomic and fundamental factors are currently irrelevant.

On Wednesday evening, Federal Reserve Chair Jerome Powell delivered a speech. From the start, we had no expectations of any new information from the head of the Fed. In early April, Powell clearly outlined not only his stance but also that of the entire Federal Open Market Committee. The consequences of the trade war are unpredictable and cannot be assessed at this stage, especially since Trump has not yet completed the implementation of tariffs and negotiations are still ongoing with several countries. Simply put, the time to "count the chickens" will come "in autumn"—once the final tariffs are in place and their first effects emerge.

Thus, the Fed's position remains unchanged: decisions will be based on macroeconomic data reviewed at each meeting. Of course, Powell reiterated that the U.S. economy will likely slow while inflation and unemployment will probably rise. But any economist or analyst could say that right now—you don't need to be the head of the U.S. central bank to draw such conclusions.

The U.S. dollar remains under heavy market pressure. Once again, we note a pattern: when no new tariffs are announced, the dollar stops falling. However, it still can't show any growth. This reinforces the point that the market is focused solely on the trade war factor. Since Powell did not announce anything new, the market practically ignored his speech.

The outlook for the Fed's key interest rate varies widely among opinions. Some experts believe the Fed will be forced to save the economy, which is "sinking" due to Trump's actions, and will cut rates even in the face of rising inflation. Occasionally, there are reports that inflation remains the Fed's top priority and that rates might be raised to fight it—even if that further damages the economy. We don't want to speculate. It's important to remember that central banks' monetary policy has no real influence on market sentiment. The dollar continues to plunge even though the Fed hasn't lowered rates since last year—and judging by official statements, it doesn't intend to do so in the near future. Meanwhile, the Bank of England may cut its rate as soon as the next meeting, given that UK inflation slowed significantly in March and the economy continues to struggle.

This image is no longer relevant

The average volatility of GBP/USD over the last five trading days is 110 pips, which is considered "average" for the pair. Therefore, on Friday, April 18, we expect movement within a range bounded by 1.3153 and 1.3373. The long-term regression channel is pointing upward, though a downward trend remains on the daily time frame. The CCI indicator recently entered the overbought zone, suggesting a pullback, which has already been concluded.

Nearest Support Levels:

S1 – 1.3184

S2 – 1.3062

S3 – 1.2939

Nearest Resistance Levels:

R1 – 1.3306

R2 – 1.3428

R3 – 1.3550

Trading Recommendations:

The GBP/USD pair continues its confident upward movement. We still believe that the entire upward move is a correction on the daily time frame, which has already taken on a somewhat irrational nature. However, if you trade using pure technicals or "the Trump factor," long positions remain relevant with targets at 1.3369 and 1.3428 since the price is above the moving average. Sell orders remain attractive, with targets at 1.2207 and 1.2146, but now, the market isn't even considering buying the U.S. dollar while Donald Trump continues to trigger new sell-offs of the American 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 InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
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

What to Pay Attention to on June 16? A Breakdown of Fundamental Events for Beginners

No macroeconomic reports are scheduled for Monday, but the market does not lack news. This week, Donald Trump announced his intention to raise all import tariffs, as none

Paolo Greco 06:46 2025-06-16 UTC+2

GBP/USD Overview – June 16: How Trump Is Undermining the Dollar

The GBP/USD currency pair will remain under the influence of geopolitics and politics in the new week. Essentially, we've been saying the same thing every day for the past four

Paolo Greco 04:54 2025-06-16 UTC+2

EUR/USD Overview – June 16: The Israel-Iran Conflict Changes Nothing

The EUR/USD currency pair moved sharply back and forth throughout Friday. The pair traded with high volatility for two consecutive days, and there is a clear and logical explanation

Paolo Greco 04:54 2025-06-16 UTC+2

EUR/USD. Weekly Preview. Focus on the Middle East and the Federal Reserve

The final trading day of last week ended on an uncertain note. Reacting to Middle East developments, the EUR/USD pair sharply declined on Friday, retreating from the multi-year price high

Irina Manzenko 01:30 2025-06-16 UTC+2

Bitcoin Gripped by Fear

Charity begins at home. As it turns out, the 47th President of the United States' loyalty to the crypto industry is rooted in personal interests. Donald Trump and his family

Marek Petkovich 01:29 2025-06-16 UTC+2

US Dollar: Weekly Preview

Once again, the dollar will be in the spotlight this week, not only because of the Federal Reserve meeting but also due to political developments in the United States

Chin Zhao 00:38 2025-06-16 UTC+2

British Pound: Weekly Preview

The UK will have at least one report that deserves attention. On Wednesday, the May inflation report will be released. According to market expectations, inflation will slow to 3.4% year-over-year

Chin Zhao 00:38 2025-06-16 UTC+2

Euro Currency: Weekly Preview

The European currency continues to benefit from the weakness of the U.S. dollar, which became fully apparent after Donald Trump returned to the scene. Honestly, discussing how Trump—or the events

Chin Zhao 00:38 2025-06-16 UTC+2

USD/CAD. Analysis and Forecast

The USD/CAD pair is showing a modest recovery from levels below 1.3600, retracing most of the previous day's losses, supported by a rebound in the U.S. dollar. In addition, concerns

Irina Yanina 13:09 2025-06-13 UTC+2

AUD/JPY. Analysis and Forecast

The AUD/JPY pair has been under selling pressure for the third consecutive day, reaching an almost two-week low around 92.30 during Friday's Asian session. After a sharp drop, spot prices

Irina Yanina 12:53 2025-06-13 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.