GBP / USD. Smart money. Libra Ignores Positive and Negative Factors

[Ben Graham]

The GBP/USD pair has fully filled the last bullish imbalance, receiving a reaction from its lower boundary. Thus, a bullish signal has been formed for the pound as well, exactly as I expected. Most importantly, buy signals were formed almost simultaneously for both the pound and the euro. This significantly increases the probability of further growth in both currency pairs.

At this point, new trades have been opened, the news background supports the bulls, the U.S. labor market remains in a state that cannot be described as "positive," and Donald Trump continues to wage battles against the entire world, including his own country. There are currently no bearish patterns, nor is there any clear reason for them to appear. Bearish patterns require underlying causes and active participation from the bears. And what reason would the bears have to come out of hibernation? Winter is far from over.

The unemployment rate in the U.S. has declined, which is certainly positive, but the revision of labor market data for 2025 wiped out all the gains the dollar had been slowly accumulating in recent weeks. Today, it also became known that inflation slowed to 2.4%, significantly bringing closer another round of Federal Reserve monetary easing. In my view, dollar buyers (who are bears on GBP/USD and EUR/USD) are currently absent from the market. Only the bulls are trading. If they increase positions, the pair rises. If they take profits, the pair declines. That is the simple mechanics of price movement. At present, the bulls have everything they need to continue pushing the pair upward.

The bullish trend in the pound remains intact, as confirmed by the chart structure. Since November 5, traders have had at least three opportunities to open long positions, and this week they received a fourth. Bullish signals appear regularly, while bearish patterns have not been seen for quite some time. In my opinion, this is not the time to reinvent the wheel. There are currently no signs of a bearish offensive. I see no reason to consider short positions.

On Friday, the news background favored the British pound, as the only U.S. inflation report showed a figure many had anticipated with concern. Inflation in the U.S. continues to slow and reached 2.4% in January. Core inflation declined to 2.5% year-over-year. In my view, the Federal Reserve may implement another rate cut in the near future. If the labor market is recovering (according to January data), rates should be lowered to prevent inflation from falling below 2%. If the labor market is not recovering, rates should be lowered all the more to stimulate growth.

In the U.S., the overall news background remains such that, in the long term, little can be expected other than further dollar weakness. The situation in the United States remains fairly complex. U.S. labor market data continue to disappoint more often than they impress. Three of the last four FOMC meetings ended with dovish decisions. Trump's military aggression, threats toward Denmark, Mexico, Cuba, Colombia, Iran, EU countries, Canada, and South Korea, the initiation of criminal proceedings against Jerome Powell, a new government shutdown, and the scandal involving the U.S. elite in the Epstein case all add to the current picture of political and structural crisis in the country. In my opinion, bulls have everything they need to continue their offensive throughout 2026.

For a bearish trend to develop, a strong and stable positive news background for the U.S. dollar is required — something difficult to expect under Donald Trump. Moreover, the U.S. president himself does not need a strong dollar, as it would keep the trade balance in deficit. Therefore, I still do not believe in a bearish trend for the pound. Too many risk factors continue to weigh heavily on the dollar. If new bearish patterns appear, a potential decline in the British pound could be considered, but at the moment, none are present.

Economic Calendar for the U.S. and the UK:

February 16 – The economic calendar contains no notable entries. The news background will have no impact on market sentiment on Monday.

GBP/USD Forecast and Trading Advice:

For the pound, the picture remains bullish. A new buy signal has been formed and has not been invalidated. Bulls have launched a new offensive that threatens to become prolonged and exhausting. They are not planning a rapid, aggressive advance. Why rush when they can steadily sell the dollar step by step? Since the bullish trend raises no doubts, traders are left with trading to the upside based on clear patterns and signals. Imbalance 14, as expected, provided such an opportunity. I previously considered 1.3725 as a potential upward target — that level has been reached — but the pound may rise much higher in 2026. There are no limits. The next attractive target appears to be 1.4246 — the June 2021 high.

The material has been provided by InstaForex Company - www.instaforex.com