Technical Analysis for GBP/USD Pair

The GBP/USD pair rose on Monday, reaching the previous report’s target at the 1.35100 level, which represents a Weekly FVG (WFVG). These levels reflect internal liquidity on the weekly timeframe. Prices then reversed downward on the 1-hour chart, forming an IFVG and shifting the bullish structure to a bearish one. We also observe notable strength in the US dollar currently. These factors support a bearish outlook for GBP against the USD.

Key Economic News

Jerome Powell’s speech today is the most anticipated event on the global market agenda, especially in the absence of strong US data during the session.
Markets are closely watching for any hints regarding the Fed’s policy path and future rate decisions.
A dovish tone could weaken the dollar and support gold and equities, while a hawkish tone would likely strengthen the dollar and pressure risk assets.
This comes a day after Bank of England Governor Andrew Bailey’s speech, which clearly led to a drop in the pound. Bailey expressed a cautious view on inflation and hinted that the rate hike cycle may be nearing its end.
This divergence in tone between the Fed and the Bank of England adds more pressure on the pound versus the dollar and increases market sensitivity to Powell’s remarks.
Every word matters today, and even a small signal from Powell could trigger significant volatility across currencies, commodities, and global indices.

Liquidity Levels

A decline in price is expected toward the 1.3445 level, which is an FVG on the 4-hour timeframe.
If this level is broken with a confirmed close, further downside toward 1.3400 is likely.

Invalidation Scenario

The bearish scenario would be invalidated if price reaches the 1.3520 level.