18.02.202618:17 Forex Analysis & Reviews: GBP/USD. Smart Money. Bears May Be Losing Momentum

In my view, the news background is more favorable for bulls than for bears. The U.S. labor market remains in a condition that cannot be described as "positive," while Donald Trump continues to wage battles against the entire world, including his own country. Analysts assign nearly a 90% probability that in the coming weeks Trump will order the largest military operation in modern history against Iran, despite ongoing negotiations with Tehran. Despite the three-week decline in the pound, there is still not a single bearish pattern at this time. Thus, even if the downward movement continues, traders have no clear basis for opening short positions. And does it even make sense if the bullish trend is obvious?

The bullish trend in the pound remains intact, as confirmed by the technical picture. Since November 5 alone, traders have had at least three opportunities to open long positions, and last week they received a fourth. Bullish signals form regularly, while bearish patterns have not appeared for quite some time. Even the most recent bullish imbalance and bullish signal have not been invalidated. We are observing an unnecessary decline, but the market does not move according to my rules. We must adapt to the market.

On Wednesday, the news background once again gave bears a chance to attack, as both the headline CPI and core CPI in the UK showed significant slowing in January. Recall that at the previous meeting, Andrew Bailey stated that if evidence emerges of inflation moving toward the 2% target, the Bank of England would be ready for further monetary easing. Thus, the probability of a Bank of England rate cut at the next meeting has risen to high levels. However, today the bears chose not to attack. Perhaps their strength was exhausted yesterday.

In the U.S., the overall news background suggests that, in the long term, little can be expected other than a decline in the dollar. The situation in the United States remains quite complex. U.S. 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 actions, threats toward Denmark, Mexico, Cuba, Colombia, Iran, EU countries, Canada, and South Korea, the criminal case against Jerome Powell, a new government shutdown, and the scandal involving U.S. elites in the Epstein case all add to 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.

A bearish trend would require a strong and stable positive news background for the dollar—something 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. Therefore, I still do not believe in a bearish trend for the pound. Too many risk factors continue to weigh heavily on the dollar. If new bearish patterns appear, we could consider potential downside in the pound, but at the moment there are none.

News Calendar for the U.S. and the UK:

United States – Change in Initial Jobless Claims (13:30 UTC).

On February 19, the economic calendar contains only one entry, which is of no particular interest. The impact of the news background on market sentiment on Thursday is expected to be minimal.

GBP/USD Forecast and Trading Tips:

For the pound, the picture remains bullish. A new buy signal has been formed and has not been invalidated. The bulls have launched a new offensive that threatens to become prolonged and exhausting. They are not planning a rapid and aggressive advance. Why rush if the dollar can be sold gradually? Since the bullish trend raises no doubts, traders are left to trade upward based on clear patterns and signals. As expected, imbalance 14 provided such an opportunity.

As a potential growth target, I considered the level of 1.3725. This level has been reached, but the pound may rise much higher in 2026. There are no limits. The next attractive target appears to be 1.4246—the June 2021 peak.