GBPUSD Weekly Analysis 02/08/2025

Fundamental analysis

1. Overview of Momentum and Market Structure

• Current Momentum: Bullish.

• Previous Week's Performance: Bullish.

• Range: 1.2249 – 1.2550

• Expectations: Anticipating a bullish continuation within the range, targeting new highs.

Trading Plan

Bearish Bias

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

  • 1.2550 (Extreme Liquidity)

  • 1.2664/1.2735( Extensions)

• Targets:

  • Primary target: 1.2360 (H4 Liquidity) and 1.2323 (H4 FVG).

  • Secondary target: 1.2249(Extreme Liquidity)

For Long

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

  • 1.2360 (H4 Liquidity)

  • 1.2323 (H4 FVG)

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

• Targets:

  • Primary Targets: 1.2491 (Internal Liquidity) and 1.2550 (Extreme Liquidity).

  • Extended Targets: 1.2664 and 1.2735 (Extensions).

Summary

• The bias remains bullish within the 1.2249– 1.2550 range.

• Long entries are favorable around support levels (1.2360, 1.2323) with confirmation.

• Short opportunities may arise near or above 1.2550, 1.2664, 1.2735 if signs of exhaustion emerge.

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

Technical analysis

The Pound Sterling (GBP) fell to near 1.2400 against the US Dollar (USD) after the January Nonfarm Payrolls (NFP) report. While job growth missed expectations at 143K (vs. 170K forecast), stronger-than-expected wage growth (4.1% YoY) fueled concerns that the Federal Reserve (Fed) might delay rate cuts, pushing the US Dollar higher.

Adding pressure to GBP, the Bank of England (BoE) recently cut rates by 25 basis points to 4.5%, and surprisingly, hawkish MPC member Catherine Mann supported a deeper 50 bps cut. This unexpected dovish shift signaled growing concerns over the UK’s economic outlook, leading to a sharp sell-off in Sterling.

With the Fed likely to hold rates longer and the BoE leaning dovish, GBP/USD remains under pressure. Investors will watch for further signals from both central banks and potential trade tensions with the US that could impact market sentiment.