This week's economic calendar is packed with critical events that could drive major market moves, including U.S. labor data, inflation updates from Australia and Germany, and central bank decisions from Japan. GBPUSD continues to show bullish momentum, though technical signals suggest caution is warranted. Meanwhile, global fundamentals remain fragile: the UK faces a potential two-year growth delay due to inflation and trade disruptions, while the U.S. dollar is losing its traditional safe-haven appeal amid rising political and economic uncertainty. Investors should remain alert as shifting fundamentals and technical dynamics create an increasingly complex trading environment.
Overview
This week's economic calendar is packed with critical events that could drive major market moves, including U.S. labor data, inflation updates from Australia and Germany, and central bank decisions from Japan. GBPUSD continues to show bullish momentum, though technical signals suggest caution is warranted. Meanwhile, global fundamentals remain fragile: the UK faces a potential two-year growth delay due to inflation and trade disruptions, while the U.S. dollar is losing its traditional safe-haven appeal amid rising political and economic uncertainty. Investors should remain alert as shifting fundamentals and technical dynamics create an increasingly complex trading environment.
Key Economic Events
Tuesday 17:00 (GMT+3) - USA: JOLTS Job Openings (USD)
Wednesday 04:30 am (GMT+3) - Australia: CPI q/q (AUD)
Wednesday 04:30 am (GMT+3) - China: Manufacturing PMI (CNY)
Wednesday All Day - Germany: Prelim CPI m/m (EUR)
Wednesday 15:15 (GMT+3) - USA: ADP Non-Farm Employment Change (USD)
Wednesday 15:30 (GMT+3) - Canada: GDP m/m (CAD)
Wednesday 15:30 (GMT+3) - USA: Advance GDP q/q (USD)
Wednesday 17:00 (GMT+3) - USA: Core PCE Price Index m/m (USD)
Thursday Tentative - Japan: BOJ Policy Rate (JPY)
Thursday 15:30 (GMT+3) - USA: Unemployment Claims (USD)
Thursday 17:00 (GMT+3) - USA: ISM Manufacturing PMI (USD)
Friday 15:30 (GMT+3) - USA: Non-Farm Employment Change (USD)
Technical Analysis
Since establishing a bottom at 1.20989 on January 13, GBPUSD has been maintaining a well-defined upward trajectory characterized by a sequence of higher highs and higher lows. The initial trend reversal was confirmed by a failure swing, where the trough at 1.22487 held above the prior low, followed by a decisive breakout above key resistance at 1.25228, setting the stage for further gains.
Momentum indicators continue to reinforce the bullish outlook. The 20-period Exponential Moving Average (EMA) has crossed above the 50-period EMA, forming a "Golden Cross" — a classic signal of trend continuation. Additionally, the Momentum Oscillator remains anchored above the 100 baseline, while the Relative Strength Index (RSI) holds above the neutral 50 mark, both suggesting sustained upward momentum.
That said, a negative divergence emerging between price action and the Momentum Oscillator warrants caution. This divergence could signal a potential near-term correction before the broader bullish trend resumes.
Potential Upside Targets
Should the bulls take market control, traders may direct their attention toward the four potential resistance levels below:
1.34427: The initial resistance is 1.34427, which aligns with the daily high reached on April 28.
1.35409: The second price target is identified at 1.35409, corresponding to the 161.8% Fibonacci Extension drawn from 1.34427 to 1.32332.
1.36035: The third target is established at 1.36035, aligning with the weekly resistance, R3, estimated using the standard Pivot Points methodology.
1.37311: An additional price target is estimated at 1.37311, which corresponds to the 261.8% Fibonacci Extension drawn from 1.34427 to 1.32332.
Potential Downside Targets
Should the sellers take market control, traders may consider the four potential support levels listed below:
1.33232: The first level of support is identified at 1.33232, representing the weekly Pivot Point, PP, estimated using the standard methodology.
1.32332: The second support level is 1.32332, reflecting the daily low from April 22.
1.30142: The third support level is identified at 1.30142, corresponding to the peak marked March 20.
1.27078: An additional downward target is observed at 1.27078, corresponding to the trough from April 7.
Fundamentals
UK economic growth could be delayed by up to two years due to persistent inflation, global trade disruptions, and weaker business and consumer confidence, according to analysts. The forecast warns that Donald Trump's tariff hikes and rising domestic costs are dragging down sentiment, with growth projections for 2025 and 2026 now downgraded. While further Bank of England rate cuts could help support the economy, businesses face growing uncertainty, and investment remains subdued. However, analysts see long-term opportunities for the UK to position itself as a stable destination for investment.
On the other hand, the US dollar's status as the world's safe-haven currency is eroding as aggressive trade policies, political instability, and rising global uncertainty trigger a sharp decline in the dollar's value. Despite traditional expectations that tariffs would strengthen the dollar, the DXY index has fallen to a three-year low. Investors are shifting away from US assets, favoring gold, the euro, and Japanese bonds. Analysts warn that if current trends persist, the global monetary system could move toward a multipolar structure, reducing the dollar's dominance and raising the risk of a major dollar crisis.
Conclusion
As markets brace for a pivotal week of economic data and central bank decisions, both technical and fundamental signals highlight the growing complexity investors must navigate. While GBPUSD maintains a bullish structure, signs of momentum divergence call for caution. Meanwhile, persistent global trade tensions, inflation pressures, and political uncertainty are reshaping growth outlooks and safe-haven dynamics. With the dollar's dominance under threat and UK growth at risk of delay, market participants should remain flexible and vigilant as volatility and uncertainty continue to dominate the landscape.