GBPUSD loses ground on lower expectations of Fed rate cuts

The GBPUSD pair is trading near 1.36130, while the US dollar is gaining strength. The recent publication of strong labor market data from America has reshuffled the deck, forcing investors to revise their previous projections about the Federal Reserve’s (Fed) monetary path. This was a key driver behind the shift in GBPUSD’s trend.

The Nonfarm Payroll (NFP) report for January showed an increase of 130,000 jobs—well above the predicted 70,000. Moreover, unemployment unexpectedly fell to 4.3%. In other words, the US labor market remains tight, and inflation is still above the target level—major challenges for the Fed’s easing cycle. As a result, the market's confidence in future rate cuts has been shaken.

Across the Atlantic, the UK economy rose by a modest 0.1% in the fourth quarter (Q4), failing to meet expectations of 0.2% growth and matching weak Q3 figures. At the same time, business investment dropped by 2.7% to the lowest level since 2021. Under these circumstances, the Bank of England (BoE) is likely to cut rates as early as March. The widening policy divergence between the Fed and the BoE is now putting extra pressure on the pound.

Today, February 13, 2026, key US inflation data are scheduled to be released. This report may clarify the central bank’s stance. If these readings exceed forecasts, the probability of policy easing will decline further, strengthening the dollar.

From a technical perspective, the market seems cautious today, with almost no volatility in sight amid a reestablished downtrend. Stochastic lines (%K=49, %D=60) formed a bearish crossover in neutral territory, confirming the current decline. The Chaikin Oscillator is in the red and diving deeper, signaling capital outflows. This is further proof of seller dominance.

Try out the following strategy for your trading:

Sell GBPUSD at the current price. Place Take profit at 1.35000. Set Stop loss at 1.37200.

This forecast holds true from February 13 till February 20, 2026.