Lihat juga
01.07.2026 06:13 PM
Overall, GBP/USD continues to move lower. Why do I think so? First, in my view, the recent appreciation of the U.S. dollar has not been fully justified by the fundamental backdrop in recent weeks. Second, the geopolitical conflict in the Middle East has come to an end, yet it was the primary driver of the dollar's strength throughout 2026. It is therefore difficult to explain why the dollar first strengthened because of the conflict and has continued to strengthen after the conflict subsided. Third, the FOMC meeting and the Fed's hawkish tone could certainly have supported the dollar, but the rally has persisted for longer than expected. Fourth, the FOMC has not yet begun tightening monetary policy, and if inflation starts to slow, further policy tightening may not be necessary. Fifth, central banks have once again resumed reducing their U.S. dollar reserves, lowering global demand for the dollar. As a result, the market currently lacks compelling reasons for another wave of bearish pressure on GBP/USD, yet the bears may continue to dominate simply because they retain the market initiative.
From a technical perspective, the pound still has room to recover toward 1.3322, but such a move would require traders to shift from selling to buying. The market did react to Bearish Imbalance 22, but the response was weak. Price first performed a liquidity sweep below the April 6 low and then below the March 31 low. As a result, we have both a weak reaction to the bearish imbalance and two bullish liquidity sweeps. At a minimum, this suggests that a corrective rebound should occur. Given that the U.S. dollar still lacks strong long-term fundamental support and has already posted impressive gains in 2026, I believe the bears are unlikely to maintain their momentum indefinitely. Nevertheless, technical analysis should remain the primary guide. If no bullish patterns or signals emerge, opening long positions would be premature. In that case, traders should wait for the market's reaction to Imbalance 21.
At present, the market remains cautious about the agreement between Iran and the United States. Even so, it is now possible to say that the active phase of the conflict has officially ended, at least for the time being. The Federal Reserve has fueled a strong rally in the U.S. dollar, but I still do not see what could sustain continued bearish pressure on GBP/USD. Will expectations of future FOMC tightening alone be enough?
The current technical picture is as follows. Last week, the market reacted to Bearish Imbalance 22, but the response was weak, offering hope that the current bearish impulse is nearing completion. Liquidity sweeps below the two most recent lows (marked by the red lines) also point to the possibility of renewed bullish momentum.
The economic calendar on Wednesday was relatively light, and traders continued to ignore most incoming data. Consequently, attention was focused almost entirely on the speeches by Andrew Bailey and Kevin Warsh. The Bank of England Governor stated that inflation is expected to return to the target level by April–May 2027, signaling little appetite for tighter monetary policy. However, the market had not expected a rate hike in the United Kingdom following the latest inflation reports. It is worth noting that U.K. consumer price inflation continues to slow.
The broader fundamental backdrop still leads me to expect long-term weakness in the U.S. dollar. The conflict involving Iran has not fundamentally changed that outlook, nor has the possibility of a Federal Reserve rate hike in 2026. Geopolitical tensions temporarily reminded the market of the dollar's safe-haven status, but the conflict has either ended or is in its final stage. Although the Federal Reserve intends to raise interest rates in 2026, which is supportive of the dollar, tighter monetary policy would also slow the U.S. economy. Kevin Warsh was appointed as FOMC Chairman by Donald Trump to pursue a more accommodative monetary policy and accelerate economic growth—something Trump believed Jerome Powell had failed to achieve. In my opinion, any tightening cycle by the Federal Reserve is unlikely to be prolonged or evolve into a sustained tightening cycle. Therefore, I continue to view any appreciation of the U.S. dollar as temporary rather than structural.
The economic calendar for July 2 contains three scheduled events, all of which can be considered important. As a result, the fundamental backdrop is likely to influence market sentiment during the second half of Thursday's trading session.
From a long-term perspective, the outlook for GBP/USD remains bullish, while the reaction to Bearish Imbalance 22 resulted in only a limited bearish move. This leaves the bulls with an opportunity to regain the initiative. The pound could still resume its decline toward 1.3007, the level that would invalidate the broader bullish trend, but that would require fresh bearish patterns and confirmation signals. At present, Imbalance 21 remains the only notable bearish setup. On the other hand, the two recent liquidity sweeps support the bullish case. If a bullish pattern forms, it would significantly strengthen the prospects for a bullish recovery. For now, however, no new bullish or bearish signals have emerged.
