🔍 Fundamental Overview
GBP/USD begins the week with two-sided pressure, as markets weigh softer US inflation against weaker UK economic performance.
🇺🇸 United States (USD Side)
• Soft CPI is weighing on the dollar:
January CPI slowed to 2.4% y/y, below the 2.5% forecast and down from 2.7% in December, pushing traders to price 80%+ probability of Fed easing by June.
• Labor market still strong:
The prior NFP beat expectations sharply, which initially lifted USD but failed to maintain momentum—showing broader strategic bearishness on the dollar that persists unless reinforced by consistently strong data.
• Monetary policy expectations:
Traders now see rate cuts by April–June, reinforcing USD softness heading into the week.
🇬🇧 United Kingdom (GBP Side)
• UK economy remains fragile:
Late 2025 UK GDP data showed weak construction and business investment performance, adding to concerns around economic momentum.
• BoE tone remains dovish:
A “rather dovish” Bank of England stance contributed to GBP underperformance relative to other major currencies and commodity currencies.
• Critical UK data ahead:
Important UK releases this week (e.g., inflation, growth components) may increase volatility and help determine whether the pound can recover.

📊 Technical Analysis
GBP/USD remains in a complex corrective structure, struggling to shift into a fully bullish trend.
Support Levels
• 1.3595–1.3620 — Key near-term support zone; last rebound originated here.
• 1.3526–1.3539 — Next structural support; break below reopens deeper downside.
• 1.3425 — Weekly support target per broader correction model.
Resistance Levels
• 1.3660 — Immediate resistance on H1, capping intraday advances.
• 1.3730–1.3755 — Short-term bullish reversal threshold (includes Fib 161.8%).
• 1.3795 — Major resistance; break above resets bullish structure toward 1.4020.
Indicators & Structure
• Wave Structure: Still bearish — last downward wave broke the previous low, and the last upward wave failed to make a new high.
• Momentum: MACD weakening on lower timeframes, signalling soft bearish pressure with potential for rebounds.
• Market Positioning: Buyers hold the line above key moving averages (EMA 85), signaling underlying bullish attempts despite broader weakness.

📈 Trading Scenarios
✅ Bullish Scenario
• Entry: Above 1.3655–1.3660 with confirmed breakout
• Targets:
o 1.3735–1.3755
o 1.3795 (trend reversal zone)
• Stop Loss: Below 1.3595
• Catalysts:
o Softer U.S. data (CPI/PPI/claims)
o UK inflation beating expectations
• Rationale:
A break above 1.3660 would signal buyers regaining control from the descending structure and could open the path toward key Fibonacci and structural resistance levels.

❌ Bearish Scenario
• Entry: Below 1.3595
• Targets:
o 1.3539
o 1.3425 (weekly target)
• Stop Loss: Above 1.3660
• Catalysts:
o Stronger-than-expected U.S. numbers
o Further deterioration in UK macro data
• Rationale:
A decisive break below 1.3595 shifts control back to sellers and likely triggers a deeper correction into the mid 1.34s.