CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 66% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
empty
You are about to leave
www.instaforex.eu >
a website operated by
INSTANT TRADING EU LTD
Open Account

16.05.202510:13 Forex Analysis & Reviews: Forecast for GBP/USD on May 16, 2025

This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here.

On the hourly chart, the GBP/USD pair on Thursday reversed once again in favor of the British pound and began a renewed move toward the resistance zone of 1.3344–1.3357. A rebound from this zone will again work in favor of the U.S. dollar and could lead to a renewed decline toward the 100.0% Fibonacci retracement level at 1.3205. A breakout above the 1.3344–1.3357 area would increase the likelihood of continued growth toward the next level at 1.3425.

Exchange Rates 16.05.2025 analysis

The wave situation became more complex after the latest bullish assault. The last completed upward wave broke through the previous peak, but the most recent downward wave also broke through the previous low. This suggests a potential transition from a bearish to a bullish trend. Bulls may find it difficult to rise above 1.3425 without new trade-related headlines from Donald Trump about new or expanded tariffs—but bears haven't had it easy either, as recent days have shown. In my opinion, the latest upward wave was a fluke; the 1.3344–1.3357 zone will reveal the true strength of the bulls.

The news background on Thursday offered slight support to the bulls. The UK economy grew more than expected, allowing pound bulls to mount a new, albeit weak, attack—dampened by a worse-than-expected industrial production report. From the U.S., the Producer Price Index fell sharply by 0.5% m/m in April. However, we already know that CPI also decreased—from 2.4% y/y to 2.3%. This brings the Fed closer to a tipping point where it will become increasingly difficult to resist market pressure. The market is calling for a rate cut, Donald Trump is demanding monetary easing, and only Jerome Powell remains defiant, expecting inflation to rise again. Yet Powell won't be able to hold his ground indefinitely without supportive data. Therefore, bears are urgently in need of good news—such as tariff reductions, signed trade deals, or any other positive headlines. Otherwise, bulls could regain the upper hand on expectations of policy easing.

Exchange Rates 16.05.2025 analysis

On the 4-hour chart, the pair rebounded from the 100.0% Fibonacci level at 1.3435, reversed in favor of the U.S. dollar, and continues to decline toward the 76.4% retracement level at 1.3118. No forming divergences are observed on any indicators today. The upward trend channel still points to a bullish trend. Only a confirmed break below the channel would signal a prolonged bearish trend.

Exchange Rates 16.05.2025 analysis

The sentiment among the "Non-commercial" trader category became more bullish over the last reporting week. The number of long positions held by speculators rose by 3,320, while short positions declined by 1,956. Bears lost their advantage. The gap between long and short positions now stands at 29,000 in favor of bulls: 94K vs. 65K.

In my view, the pound still faces downside risks, but recent developments could prompt a long-term trend reversal. Over the past three months, the number of long positions has risen from 65K to 94K, and short positions have fallen from 76K to 65K. Under Donald Trump, faith in the U.S. dollar has eroded, and COT data show that traders lack a strong appetite for dollar-buying.

News Calendar: U.S. and U.K.

  • U.S. – Building Permits (12:30 UTC)
  • U.S. – Housing Starts (12:30 UTC)
  • U.S. – University of Michigan Consumer Sentiment Index (14:00 UTC)

On Friday, the economic calendar includes several entries, but none are particularly significant. Market sentiment may be only mildly affected by the data releases.

GBP/USD Forecast and Trading Tips:

Selling the pair was possible on a rebound from the 1.3344–1.3357 zone on the hourly chart with targets at 1.3265 and 1.3205. Today, selling is again possible from this resistance zone. Buying may be considered on a confirmed breakout above 1.3344–1.3357 with a target at 1.3425.

Fibonacci levels:

  • Hourly chart: based on 1.3205 – 1.2695
  • 4-hour chart: based on 1.3431 – 1.2104
Samir Klishi
Analytical expert of InstaForex
© 2007-2025

Open trading account

InstaForex analytical reviews will make you fully aware of market trends! Being an InstaForex client, you are provided with a large number of free services for efficient trading.




CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 66% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
You are now leaving www.instaforex.eu, a website operated by INSTANT TRADING EU LTD
Can't speak right now?
Ask your question in the chat.
Widget callback

Turn "Do Not Track" off

 

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 Instant Trading EU Ltd 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.