Will sterling continue to strengthen vs the dollar?
According to the charts, something significant is happening with sterling and movements against the US currency. Independent analyst Alistair Strang assesses potential.
12th February 2026 07:46
by Alistair Strang from Trends and Targets
There are times when you’ve got to ask if something is real and not just a figment of the stock market's sense of humour. At present, GBP:USD is providing such a level of entertainment, asking us to believe a downtrend, which originates back in October 2007, is genuine and something we should pay close attention to.
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Despite no less than four signs, we’re just a little sceptical about taking this Blue line seriously.
Source: Trends and Targets. Past performance is not a guide to future performance.
Out of nowhere, the trend above allegedly confirmed itself in July 2025, doubly confirmed its existence in August of 2025, had the market break out through the trend in January of this year, and experienced the Holy Grail of breakouts, the market “back testing” the trend last week.
This last item, “the back test”, is an important tenet of faith with the true believers of chart discipline. It bothers us a little as, if it’s true, the market apparently believes sterling intends to strengthen quite considerably against the US dollar as is using a 19-year-old trend to measure itself against. This trend obviously bothers us a bit!
When we apply our usual arithmetic to the Blue downtrend, it reveals we should believe future movement above just 1.3790 should bring a strong twitch in the direction of 1.4177. However, a movement such as this would drag the currency pairing into Big Picture territory and this suggests – due to multiple arguments – sterling should trigger toward a “safe and solid” 1.4307. Glancing at the chart, there’s little reason to disparage such a potential but our Big Picture secondary, if 1.4307 is exceeded, comes in at 1.5279.
The implication of such a move would be a return to trading levels not seen since President Trump was first elected and in the hiatus period where his inauguration was awaited. There is certainly a visual argument favouring the 1.5279 level, a threat of a period of delay until the world is ready to believe a future attraction from 1.8449 is proving attractive.
The core reason for our cynical attitude does reside in politics.
But if things intend to go wrong, GBP:USD needs to wither below 1.35000 to potentially trigger reversal down to 1.3421 with our secondary, if broken, a visually acceptable 1.3106.
Source: Trends and Targets. Past performance is not a guide to future performance.
Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.
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