On the hourly chart, the GBP/USD pair continued its upward movement on Tuesday toward the resistance zone of 1.3611–1.3633. This is already the fifth attempt by the bulls to secure a foothold above this area. A close above it would allow for expectations of continued growth toward the next Fibonacci correction level of 200.0% – at 1.3749. A rebound would favor the US dollar and a decline toward the 127.2% Fibonacci level – at 1.3527.

The wave situation indicates the end of the now "bearish" trend, which lasted just about a week. The last completed downward wave broke the previous low by only a few points, while the new upward wave easily broke the previous high. Over the past week, the bears occasionally received support from news from the Middle East, but the end of the conflict forced them to retreat once again.

Tuesday's news background was rather weak, but that did not prevent the bulls from pressing forward. The war in the Middle East between Iran and Israel is currently paused — though I wouldn't risk calling it fully over. Jerome Powell's statement was no different from his previous ones: no monetary policy easing is planned in the near term due to the uncertain final impact of Trump's trade policy on the economy and inflation.

Meanwhile, MPC member Megan Greene stated that inflation in the UK is shaping up to be persistently high rather than a one-time spike. To recap, inflation rose over the past couple of months to 3.4% y/y. Thus, Greene supports keeping interest rates at their current level until inflation begins to decline again. She confirmed that price stability remains the top priority. The Bank of England has lowered rates twice this year but revised its forecasts for economic growth and inflation — now expecting weaker growth and higher inflation. In my view, this is not a critically important factor for the pound right now, but it gives the bulls one more reason to stay on the offensive.

On the 4-hour chart, the pair reversed in favor of the pound and continued rising toward the 127.2% corrective level at 1.3795. The bears managed a close below the ascending trend channel, but the news background did not allow them to build on that success. For now, further growth can be expected on both charts. No emerging divergences are observed on any indicator.

Commitments of Traders (COT) Report:

Sentiment in the "Non-commercial" trader category became less bullish in the last reporting week. The number of long positions held by speculators declined by 4,794, while short positions increased by 3,983. However, the bears have long since lost their market advantage and have no chance of success. The gap between long and short positions is 43,000 in favor of the bulls — 106,000 vs. 63,000.

In my opinion, the pound still faces downward risks, but the events of 2025 have fundamentally shifted the market in the long term. Over the past three months, the number of long positions has increased from 65,000 to 106,000, while short positions decreased from 76,000 to 63,000. Under Donald Trump, confidence in the dollar has weakened, and the COT reports show that traders are not eager to buy the dollar. Therefore, regardless of the broader news background, the dollar continues to decline amid events surrounding Trump.

News Calendar for the US and UK:

USA – FOMC Chair Jerome Powell's Speech (14:00 UTC)

Wednesday's economic calendar contains only this entry. The impact of the news background on trader sentiment during the day may be limited.

GBP/USD Forecast and Trader Advice:

Selling the pair is possible today upon a rebound from the 1.3611–1.3633 zone with targets at 1.3527 and 1.3444. I previously recommended buying after a close above the 1.3425–1.3444 zone with targets at 1.3527 and 1.3611–1.3633. Today, buying the pair is advisable after a close above the 1.3611–1.3633 zone with a target at 1.3749.

Fibonacci levels are drawn based on 1.3446–1.3139 on the hourly chart and 1.3431–1.2104 on the 4-hour chart.