On the 24th of December, GBP/USD went above 1.35272 which was the high that was created on the 1st of October. It then went on to create the high of the current bull market at 1.35339, which is also the first bull market we have seen since April 2025.
Price action on the 4H indicated weakness at this level, possibly hinting that the bears might be stepping in around that level.
It seemed like price was failing to break through, but with GBP/USD’s history of having trends that last a long time, it was a higher probability for the bull run to continue even further. But as we know, price can not move in just one direction, and that resistance was a good level for bears to start selling. We were then met with a strong down trend coming into 2026.
The BoE started cutting rates in 2025 because of a slow in growth for UK inflation. US interest rates have been kept at an attractive rate for investors, further weakening the overall sentiment against the British Pounds.
Now, as we have started 2026, GBPUSD did manage to bounce back in what seemed like an overnight move.
Instead of easily growing, it was almost sudden. This could be largely due to the Venezuela situation which has shaken markets everywhere. But it also might be price action related. If we look at the higher time frame price action (Daily time frame) we can see that the pullback into old highs was necessary in order for GBPUSD to continue this up trend.
What can traders expect in the upcoming few weeks for the pair (GBPUSD)? As we are slowly approaching highs, so is CPI slowly approaching. On the 13th of January there will be multiple releases of CPI dating from Nov, due to the government shutdown that took place. This could bring enormous market volatility and will make or break this trend that we are in.
With price breaking through all the significant highs, we have one last high left before we reach 5 year highs. But this high is no joke as it was the highest high in 2025 and could pose a significant threat to the overall trend.
Your main focus should be on what price is currently doing before CPI and what it will do on the days leading up to it, this will show exactly what GBPUSD’s intentions are and could set the trend for 2026.
(Just my opinion, not financial advice)