The Pound has fallen against the US Dollar for a fourth day, trading near 1.3600 on Friday after dropping from weekly highs above 1.3700. Lower risk appetite has supported a USD rebound, while trading volumes remain low ahead of US Consumer Price Index data.
US headline CPI is expected to rise 0.3% in January, with the yearly rate easing to 2.5% from 2.7% in December. Core CPI is forecast to fall to 2.5% year on year from 2.6% in December.
Technical Picture And Near Term Levels
GBP/USD is testing support near 1.3600, close to the lower boundary of an ascending channel on the daily chart. This keeps the broader bias positive while short-term price action stays muted.
The 14-day Relative Strength Index stands at 51 after moving down from overbought levels. A reading near 50 points to range-bound trading, while a move above 60 would favour further gains.
We remember looking at this exact scenario back in February 2025, when GBP/USD was testing the 1.3600 level while everyone held their breath for US inflation figures. The market was positioned for US inflation to ease, which was expected to weaken the dollar. That initial forecast for inflation to fall to 2.5% was the dominant narrative at the time.
What actually happened throughout 2025 was a lesson in stubborn price pressures, as US core inflation proved far stickier than anticipated, averaging 3.9% in the second half of the year. This forced the Federal Reserve to scrap any plans for rate cuts and maintain a hawkish tone well into the autumn. The stronger-for-longer dollar theme ultimately shattered the technical support we saw on the charts.
Implications For Traders And Hedging
Meanwhile, the UK economy struggled, with GDP growth for 2025 coming in at a meager 0.5% and the Bank of England having to keep rates high to fight its own inflation battle. This divergence in economic strength meant that the ascending channel we were watching in early 2025 was a bull trap. That support at 1.3600 failed, and the pair trended significantly lower over the following months.
Looking at today, February 13, 2026, we see a similar dynamic at play, making the lessons from last year incredibly relevant. The latest US non-farm payrolls data showed a surprisingly strong 215,000 jobs added in January, while UK inflation just printed at 3.1%, still well above the Bank of England’s target. Given this backdrop, derivative traders should remain cautious of any pound strength and consider buying puts on GBP/USD to protect against a repeat of last year’s downward slide.
