GBP/USD. Smart Money. New Shutdown in America on February 1

[Ben Graham]

The GBP/USD pair has also reversed in favor of the British pound and has begun a new upward move. Unfortunately, unlike the EUR/USD pair, no buy signal was formed, so traders were unable to open new positions. However, not all is lost, and there is no reason for despair. Monday may end with the formation of a new bullish imbalance, which could later serve as a zone for opening long positions.

The new week began with fresh attacks from Donald Trump. This time, Canada was in the spotlight for trading with China without Washington's approval. Traders have not yet reacted to the news of a potential 100% tariff increase on Canadian goods, but it would be premature to panic. At the moment, everything is playing in favor of the pound. The Federal Reserve is unlikely to support the dollar this week, Donald Trump continues to attack, criticize, and threaten countries around the world one by one, and a new government shutdown may begin in the United States on February 1. Let me remind you that the last shutdown lasted a month and a half, and the issue was resolved only by passing temporary funding through January 31. Therefore, if funding is not extended in the near future, starting February 1, audiences nationwide may once again watch a new blockbuster titled "Shutdown, or the Art of Diplomacy."

Since the bullish trend in the euro remains intact, in my view, the bullish trend in the pound also remains in place. I cannot imagine a bullish trend in the euro occurring simultaneously with a bearish trend in the pound. However, there are currently no active bullish patterns. A new bullish imbalance may form today, which could already allow traders to open long positions tomorrow.

There was very little economic data on Monday, and traders reacted calmly to the positive U.S. durable goods orders report. Orders rose by 5.3% in November, significantly exceeding expectations. However, as was the case last week, the positive U.S. data was ignored, as the market is fully focused on geopolitics, mass unrest in the United States, and renewed manifestations of Trump's trade war.

In the U.S., the overall information backdrop remains such that nothing but a long-term decline in the dollar can be expected. The situation in the country remains quite complex. The shutdown lasted a month and a half, and Democrats and Republicans agreed on funding only through the end of January—which ends in a week. U.S. labor market data continues to disappoint or be ignored. The last three FOMC meetings resulted in dovish decisions, and the latest data suggests that the pause in monetary easing will be short-lived. Trump's military aggression, threats toward Denmark, Mexico, Cuba, and Colombia, and the initiation of criminal proceedings against Jerome Powell further complete the picture of an ongoing "American political crisis." In my view, bulls have everything they need to continue their offensive and push prices back toward last year's highs.

A bearish trend would require strong and stable positive news for the dollar—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, despite the fairly sharp decline seen in September and October. Too many risk factors continue to hang like dead weight over the dollar. What would allow bears to push the pound lower if a bullish trend is currently forming? If new bearish patterns appear, a potential decline in sterling could be reconsidered, but at the moment, there are none.

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

• United States – ADP Employment Change (13:15 UTC)

On January 27, the economic calendar contains only one entry, and it is not particularly interesting for traders. The impact of the news flow on market sentiment on Tuesday may be minimal.

GBP/USD Forecast and Trading Advice:

The outlook for the pound remains clear—what is missing are new patterns and signals. Bulls have launched a new offensive that threatens to become both prolonged and significant.

Since the bullish trend is undeniable, traders are left to trade to the upside using clear patterns and signals. At present, none are available, but they may appear as early as tomorrow. As a potential upward target, I continue to consider 1.3725, although the pound may rise much higher in 2026, especially given the events of the first three weeks of the year. If bearish patterns emerge, short trades may also be considered, but within a bullish trend, I remain a supporter of buying rather than selling.

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