GBPUSD Weekly Analysis 02/02/2025

Fundamental analysis

1. Overview of Momentum and Market Structure

• Current Momentum: Bearish.
  Previous Week's Performance: Bearish.
  Range: 1.2523 – 1.2385
  Expectations: Anticipating a bearish continuation within the range, targeting lower liquidity levels.

Trading Plan

Bearish Bias

• Strategy:
  Watch for price rejections at the following resistance zones:

  • 1.2476 (H4 Liquidity)

  • 1.2523 (Range High)

  Targets:

  • Primary targets: 1.2385 (Range Low) and 1.2375 (Daily FVG).

  • Secondary targets: 1.2343 (H4 Liquidity) and 1.2306 (Weekly FVG).

For Long

• Strategy:
  Monitor price action at the following support levels for potential reversals:

  • 1.2306 (Weekly FVG)

  • 1.2292 (H4 Liquidity)

  • 1.2204 (Weekly OB)

• Confirmation:
  Look for reversal patterns such as bullish engulfing candles or order block formations before entering long positions.

  Targets:

  • Primary Targets: 1.2476 (H4 Liquidity).

  • Extended Target: 1.2523 (Range High).

Summary

• The bias remains bearish within the 1.2523 – 1.2385 range.

• Short entries are favorable around resistance levels with confirmation.

• Long opportunities may arise near or below 1.2306 if signs of exhaustion emerge.

• Use your strict money management rules to manage risks effectively.

Technical analysis

GBP/USD continues its decline, trading near 1.2398, as US Dollar strength dominates amid Trump’s tariff threats on Canada and Mexico. The Greenback remains supported by hawkish Fed rhetoric and steady inflation, with Core PCE rising 0.2% MoM as expected.

Meanwhile, UK economic concerns persist, with fears of a slowdown weighing on the Pound. Chancellor Rachel Reeves' budget outlook has added uncertainty, keeping GBP under pressure.

Near-term risks favor further GBP/USD downside, with US policy developments and UK economic data playing a crucial role in shaping the pair’s next move.