The GBP/USD pair has also reversed in favor of the U.S. dollar and returned to bullish imbalance 14. As I mentioned earlier, the fundamental reasons behind the pair's decline raise some questions, but it should not be forgotten that the euro worked through a weekly bearish imbalance and received a fairly logical reaction. Since the euro and the pound move in the same direction most of the time, the pound has also been declining over the past few days.

The pound's quotes have now reached bullish imbalance 14. From here, either the price will react to this pattern and traders will receive a new bullish signal, or the pattern will be invalidated, in which case the dollar will continue its controversial rise. From the perspective of the fundamental backdrop in 2026, it is difficult for me to imagine a prolonged bearish offensive. Still, it cannot be said with absolute certainty that it is impossible. In my view, the most practical strategy for this week is to wait for a reaction of the euro and the pound to the bullish imbalances.

In my opinion, the bullish trend in the pound remains intact, and this is confirmed by the technical picture. Imbalance 14 acts not only as an area of interest for bulls, but also as a support zone for price. Therefore, its invalidation would point to weakness in bullish intentions and could allow bears to move into attack. The fundamental reasons for the pair's decline are questionable, but market movements do not always coincide with economic data and major events.

The fundamental background on Wednesday was rather weak. By the time this review was written, only one report had been released—the U.S. ADP employment change. The report showed an increase of just 22 thousand new jobs, which was far worse than market expectations. Traders had expected around 50 thousand new jobs to be created in January. As we can see, the U.S. labor market has once again disappointed. I would also like to note that even 50 thousand new jobs is very little for a multi-million-person U.S. economy. Nevertheless, the ADP report made it clear that the recovery of the labor market exists only in the imagination of Federal Reserve bankers. This week, the Nonfarm Payrolls report could have clarified the situation, but a new shutdown has begun in the U.S. at an inconvenient time, so there is a possibility that the report will not be published, along with the unemployment rate.

In the U.S., the overall fundamental background remains such that nothing but a long-term decline of the dollar can be expected. The situation in the country remains quite difficult. U.S. labor market data continue to disappoint or be ignored by the market. The last three FOMC meetings ended with dovish decisions, and recent data suggest that the pause in monetary easing will be short-lived. Trump's military aggression, threats toward Denmark, Mexico, Cuba, Colombia, Iran, EU countries, Canada, and South Korea, the criminal case against Jerome Powell, and the new shutdown all perfectly complement the current picture of the American political crisis. In my view, bulls have everything they need to continue their offensive throughout 2026 (of course, with pauses).

A bearish trend would require a strong and stable positive fundamental background for the dollar, which is difficult to expect under Donald Trump. Moreover, the U.S. president himself does not need a strong dollar, as the trade balance would remain in deficit in that case. Therefore, I still do not believe in a bearish trend for the pound. Too many risk factors continue to hang over the dollar like dead weight. What exactly are the bears planning to use to push the pound lower? If new bearish patterns appear, a potential decline in the British pound can be reconsidered, but at the moment there are none.

News Calendar for the U.S. and the United Kingdom

• United Kingdom – Bank of England interest rate decision (12:00 UTC)
• United Kingdom – MPC voting results on the interest rate (12:00 UTC)
• United Kingdom – Bank of England accompanying statement (12:00 UTC)
• U.S. – Change in initial jobless claims (13:30 UTC)

On February 4, the economic calendar contains four events. The impact of the fundamental background on market sentiment may be present on Thursday.

GBP/USD Forecast and Trader Advice

For the pound, the picture remains clear; only new buy signals are missing. Bulls have moved into a new offensive, which threatens to become quite prolonged and serious.

Since the bullish trend is undeniable, traders can only trade to the upside using clear patterns and clear signals. In the near future, traders may expect the formation of a new bullish signal within imbalance 14. As a potential upward target, I considered the level of 1.3725—this level has already been reached, but the pound may rise much higher in 2026. There are no limits, especially considering the events of the first month of the year. If bearish patterns form, sell trades may also be considered, but within a bullish trend, I believe buying is far more appropriate than selling.