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The GBP/USD currency pair traded similarly to the EUR/USD pair on Wednesday. Essentially, the market is currently trading the dollar, while other currencies are just "taking the cream off the top." This week, Trump has already unleashed angry tirades against Canada, threatened to raise tariffs on it to 100%, and increased tariffs for South Korea to 25%. On Tuesday evening, the US president called the decline in the dollar's exchange rate "a remarkable event" and added that the current situation would strengthen the positions of American manufacturers in global markets. The US president also stated that he could manage the dollar's rate like a yo-yo, but that he currently sees no need to do so.
Thus, even the events of 2026 (and only one month has passed) are enough for the American currency to remain in a downward peak for a long time. In our opinion, in 2026 we will see the same picture as in 2025. There will be a strong trend in which the dollar will lose another 10-15% of its value, followed by a correction or flat. It is also worth noting that the market is selling off the dollar amid concerns about Powell's departure. The head of the FOMC will leave his position in May of this year, and a person who will unconditionally follow the White House's orders will come to replace him. But will the change in leadership at the central bank change anything for the dollar or monetary policy?
To answer these two questions, we need to analyze the situation in more detail. The FOMC committee consists of 12 voting members, and currently, only three are on Trump's side. If Powell leaves and is replaced by someone other than Waller or Bowman, their number will increase to four. This is still not enough to lower the key rate to 2%. Some experts believe that the new head of the FOMC will exert internal pressure on the members of the monetary committee, but in our opinion, this is unlikely. It is much easier to believe that Trump will nonetheless achieve the dismissal of Lisa Cook, and after that, will start dismissing other officials who do not want to vote for easing policy.
Now it is time to answer the second question. What will Powell's departure change for the US dollar? After all, traders are interested in this! If there is a risk of a more significant and faster reduction in the key rate, the dollar can only expect to continue to fall. But here lies the problem! It has already been falling for more than a year, if you consider Trump's second term in the US, and for more than three years if you take the very beginning of the upward trend in EUR/USD. Thus, a shift in opinion to "dovish" within the FOMC monetary committee is unlikely even after May 2026, and the dollar will continue to fall, regardless of the current or any "softer" monetary policy.
The average volatility of the GBP/USD pair over the last five trading days is 128 pips. For the pound/dollar pair, this value is considered "high." On Thursday, January 29, we expect movements within the range bounded by levels 1.3646 and 1.3902. The upper linear regression channel is directed upward, indicating a recovery of the trend. The CCI indicator has entered the oversold area 6 times in recent months and has formed numerous "bullish" divergences, which have consistently warned traders of an upcoming resumption of the upward trend. An entry into the overbought area indicates a correction.
S1 – 1.3672
S2 – 1.3550
S3 – 1.3428
R1 – 1.3794
R2 – 1.3916
The GBP/USD currency pair is on track to resume the 2025 upward trend, and its long-term prospects have not changed. Trump's policies will continue to exert pressure on the US economy; therefore, we do not expect the American currency to grow in 2026. Even its status as a "reserve currency" is no longer significant for traders. Thus, long positions with targets at 1.3902 and 1.3916 remain relevant in the near term while the price remains above the moving average. If the price is below the moving average line, small shorts can be considered with a target of 1.3550 on a technical (correction) basis. From time to time, the American currency shows corrections (globally), but for trend growth, it needs global positive factors.
*এখানে পোস্ট করা মার্কেট বিশ্লেষণ আপনার সচেতনতা বৃদ্ধির জন্য প্রদান করা হয়, ট্রেড করার নির্দেশনা প্রদানের জন্য প্রদান করা হয় না।
ইন্সটাফরেক্স বিশ্লেষণমূলক পর্যালোচনাগুলো আপনাকে মার্কেট প্রবণতা সম্পর্কে পুরোপুরি সচেতন করবে! ইন্সটাফরেক্সের একজন গ্রাহক হওয়ায়, দক্ষ ট্রেডিং এর জন্য আপনাকে অনেক সেবা বিনামূল্যে প্রদান করা হয়।
