The GBP/USD currency pair, one of the most actively traded pairs in the foreign exchange (forex) market, continues to exhibit technical weakness despite signs of a potential bullish reversal. Recent price action has been dominated by a downward trajectory, driven by a combination of broad US Dollar strength, relative weakness in the British Pound, and disappointing technical follow-through on key chart patterns. 

Fletrade’s financial analyst, Brian Elmers, provides an in-depth look at the subject, guided by the expertise of its team. As of this writing, the attempted double bottom formation around the $1.3415 support zone appears to be losing its grip under increasing bearish pressure, with a key resistance level at $1.3467 acting as a ceiling for upside momentum. 

Technical Overview: Stairstep Resistance and Bearish Momentum

The GBP/USD pair has been consistently trending downward over the past few trading sessions, posting lower highs and lower lows, a classic bearish market structure. More importantly, price has established a series of stair-step resistance levels, which reinforce the dominant downtrend. Each attempt to push higher has met with firm rejection, indicating that bearish sentiment remains entrenched.

The price seemed to form a bullish double bottom pattern at the $1.3415 handle, a formation typically interpreted as a reversal signal in technical analysis. However, the rebound lacked volume and conviction, and as the price approached the $1.3467 resistance level, it was promptly rejected. This confirms the significance of that level and diminishes the immediate bullish outlook.

The failure to sustain the recovery above $1.3467 raises concerns about the durability of the double bottom formation. As such, this pattern may now be viewed as invalid or weak, especially given that the pair is already pulling back and potentially initiating another bearish leg lower.

Macroeconomic Fundamentals: Data and Central Banks

From a fundamental perspective, today’s trading session holds key economic events, although their impact may be limited. Earlier in the day, the UK released CPI (Consumer Price Index) data, which came in slightly hotter than expected. 

However, this marginal inflation surprise failed to lift the British Pound, underlining how market participants remain unimpressed with UK macro data amid ongoing economic stagnation and policy uncertainty.

The focus will shift to the United States, with the scheduled release of Unemployment Claims data at 13:30 London time, followed by a highly anticipated but likely uneventful Federal Reserve interest rate decision at 19:00 London time, and a press conference shortly thereafter. 

While the Fed’s announcement is typically a high-volatility event, expectations are firmly anchored in a no-change scenario, and no major surprises are expected to emerge from the FOMC (Federal Open Market Committee).

Short-Term Forecast: Intraday Pivot and Potential Scalp

From a short-term trading perspective, the $1.3467 level is likely to act as a crucial pivot for the remainder of the day. A sustained break above this resistance could trigger a short squeeze, potentially targeting the next resistance levels near $1.3500 and $1.3540. However, given the current lack of bullish momentum, this scenario seems improbable without a significant catalyst.

On the downside, any firm rejection from $1.3467, especially combined with a break below $1.3415, could lead to a continuation of the downtrend, opening the door for a test of $1.3360 and potentially $1.3300 over the coming sessions.

Given the narrow trading range and the lack of directional commitment, scalping opportunities appear more favorable than trend-following setups. A short-term short position around $1.3467, with tight stops and modest take-profits, may offer the most risk-efficient trade setup in the current environment.

Conclusion: Double Bottom Under Threat, Bearish Bias Prevails

Despite the formation of a textbook double bottom pattern, GBP/USD has failed to deliver a credible bullish breakout, instead showing signs of renewed selling pressure below key resistance. This suggests that the technical recovery attempt is fragile and possibly premature, with bearish momentum still in control.

Unless the price can break decisively above $1.3467 and establish a bullish foothold, the most prudent approach for traders may be to favor short-term scalps in the direction of the prevailing downtrend. 

With critical US economic data and a Federal Reserve meeting due later in the session, volatility could pick up, but without a strong narrative shift, the bearish pressure on GBP/USD is unlikely to abate meaningfully in the near term.