GBPUSD selloff down to 1.3570

On Friday, January 23, 2026, the greenback stumbled, pressured by a convergence of market anxieties. The sell-off stemmed from lingering concerns about US trade policy and evolving expectations over the Federal Reserve's (Fed) monetary stance.

Now, let's dive deeper into the key drivers behind the downturn.

Geopolitical whiplash. Although President Donald Trump formally withdrew his tariff threats against Europe regarding Greenland, such an episode reinforced market perception of ongoing worldwide instability. This has chipped away at confidence in US assets, prompting capital to seek shelter and opportunity elsewhere in other global currencies and traditional safe havens.

Rate-cut premium. Investors believe that the Fed is likely to lower borrowing costs more aggressively than its counterparts like the European Central Bank (ECB). This anticipated divergence in interest rate paths is eroding the greenback's yield appeal, making it less attractive to hold. 

Intervention jitters. The afternoon session saw a sharp, speculative sell-off in USDJPY, triggered by rumors that the Bank of Japan (BoJ) might step in to prop up the struggling yen. Such waves quickly rippled across major currency pairs, amplifying the dollar's losses against the euro and pound.

Softening US data. A bearish tone was cemented by Friday's economic releases, which pointed to cooling momentum. The decline in American leading indicators provided further ammunition for those betting on a weakening economy and the need for stimulative rate cuts.

Broadly speaking, the GBPUSD rally now appears stretched. The pair is flashing clear overbought signals on key oscillators, while upward momentum shows signs of fading. This technical configuration raises the odds for a near-term pullback, with initial support expected around 1.3570.

The overall recommendation is to sell GBPUSD. Place Take Profit at 1.3570. Set Stop Loss at 1.3720.

Always size the position so that your potential loss (protected by a Stop Loss) is no more than 1% of your account balance. If you can't open a position that meets such a risk criterion, it's safer to skip this trade and wait for a better, lower-risk opportunity.