The GBP/USD pair continues to decline within the framework of a "bullish" trend. Last week, the price did not respond a second time to imbalance 14, which could have preserved the bullish momentum. At the same time, imbalance 14 has not yet been invalidated. However, I no longer consider it relevant. Instead, a "bearish" imbalance 16 has formed, which is now the main pattern for traders. This is a bearish pattern within a bullish trend. In my opinion, the rise of the US dollar could end at any moment, since over the past two weeks bullish traders repeatedly had opportunities to move into a justified offensive. Why they did not take this action is unclear. Even Donald Trump's triumph over the US Supreme Court at the end of last week cannot be considered a positive factor for the dollar. But bears continue to hold the initiative, so there's nothing to be done.
In my view, the only reason for the dollar's rise in recent weeks could be Donald Trump's readiness to launch an invasion of Iran at any moment. There is no longer any doubt that this would be an invasion rather than a simple military operation. Previously, the focus was on eliminating nuclear facilities (last year's operation appears to have been only partially successful), but now it is about changing the country's leadership and completely destroying the "criminal regime." Conducting an operation of this scale would require more time than capturing Nicolas Maduro in Venezuela. US warships and aircraft carriers continue to arrive in the Persian Gulf, so Iran could erupt in the next two weeks with the strongest fire seen in decades. Against this backdrop, the market may seek safe havens for its capital, and the dollar remains a familiar and safe currency for many.
The "bullish" trend for the British pound remains in place in any case. Thus, as long as it stays above 1.3012, I would pay more attention to bullish signals. The pound's decline could be significant, but it could also end at any moment. In any case, the only currently active imbalance 16 has not yet generated any signals. Therefore, there is no basis for new trades at this time.
The news background on Tuesday was extremely weak. In the US, the ADP report for the week was released, which drew little interest. I remind readers that the market prefers to assess the US labor market by unemployment and payroll reports. Even then, market reactions are not always straightforward. A clear example is the data from January and from 2025.
Overall, the US news background remains such that nothing can be expected in the long term except a decline in the dollar. The situation in the US remains fairly complicated. US labor market statistics continue to disappoint more often than they please. Three of the last four FOMC meetings ended with "dovish" decisions. Trump's military aggression, threats to Denmark, Mexico, Cuba, Colombia, Iran, EU countries, Canada, and South Korea, the opening of a criminal case against Jerome Powell, another "shutdown," and the scandal with the US elite over the Epstein case all complement the current picture of political and structural crisis in the country. In my opinion, bulls have everything they need to continue their offensive throughout 2026.
For a "bearish" trend, a strong and stable positive news background for the dollar is required, which is hard to expect under Donald Trump. Moreover, the US president does not need an expensive dollar, since the trade balance would remain in deficit. Therefore, I still do not believe in a "bearish" trend for the pound. Too many risk factors continue to weigh heavily on the dollar. Bearish patterns could be considered for opening sell trades, but personally, I would not advise traders to do so. I consider the recent decline in the pair somewhat accidental.
News Calendar for the US and UK:
On February 25, the economic calendar contains no noteworthy entries. The impact of the news background on market sentiment on Wednesday will be absent.
GBP/USD Forecast and Trader Advice:
For the pound, the overall picture remains "bullish," but the short-term picture has turned "bearish." There are no active bullish patterns at this time. There is only a bearish imbalance, to which the price must first return and elicit a reaction, so that traders can consider potential sell opportunities.
It should be noted that the pound's decline in recent weeks has been strong enough to transform a bullish picture into a bearish one due to an unfortunate combination of circumstances. If Donald Trump had not promised to attack Iran and sent warships to the Persian Gulf, such a sharp decline in the pound would probably not have occurred. Therefore, I believe the decline could end as unexpectedly as it began. I do not consider the trend in recent weeks to have changed to "bearish."
