GBPUSD Weekly Analysis 02/22/2025

Fundamental analysis

1. Overview of Momentum and Market Structure

• Current Momentum: Bullish

• Current Bias: Bullish

• Range: 1.2562 – 1.2678

• Expectations: Price is expected to push higher towards liquidity zones before potential reversals.

Trading Plan

For Short Positions

Strategy:
Look for sell opportunities at strong resistance levels:

• Sell Levels:

  • 1.2728 (Daily Liquidity - Major Supply Zone & Institutional Distribution Area)

  • 1.2749 (Daily OB - Key Order Block & Sell Zone)

Sell Targets:

• 1.2678 (First Downside Target & Reaction Zone)

• 1.2622 (H4 FVG - Key Support & Buy Opportunity)

• 1.2585 (H4 OB - Strong Demand & Potential Bounce Zone)

Bullish Bias

Strategy:
Look for buy opportunities from key demand and liquidity zones:

• 1.2622 (H4 FVG - Key Demand Zone & Institutional Support)

• 1.2585 (H4 OB - Order Block & Potential Reversal Area)

Primary Targets:

• 1.2678 (Extreme Liquidity - Key Resistance & Potential Distribution Zone)

• 1.2728 (Daily Liquidity - Major Liquidity Grab & Institutional Sell Area)

• 1.2749 (Daily OB - Key Resistance & Potential Rejection Zone)

Summary

• Bullish bias remains valid above 1.2585, targeting 1.2678, 1.2728, and 1.2749.

• A clean break above 1.2678 (Extreme Liquidity) may accelerate buying pressure.

• Short setups become valid near 1.2728 and 1.2749 for potential reversals.

• Monitor price action at FVGs and order blocks for confirmation.

Technical analysis

GBP/USD Holds Near 1.2660 as Strong UK Retail Sales Offset US Weakness

GBP/USD briefly tested year-to-date highs near 1.2678 before retreating to 1.2660 on Friday. The pair found support as UK Retail Sales surged 1.7% in January, far exceeding expectations, while US business activity showed signs of contraction.

S&P Global’s US Services PMI slipped into recessionary territory at 49.7, dragging the Composite index lower. This fueled fresh doubts about the Federal Reserve’s rate path, pressuring the US Dollar. Meanwhile, traders are pricing in fewer Bank of England (BoE) rate cuts this year, further supporting Sterling.

With GBP/USD holding above key technical levels, a sustained break above 1.2678 could open the door for further upside in the coming sessions.