On the hourly chart, the GBP/USD pair on Monday climbed again to the resistance zone of 1.3611–1.3633, rebounded from it, and turned back in favor of the U.S. dollar. This is hardly a positive development for the dollar, as very few currently believe in a strong USD rally. The last three attempts to consolidate below the 127.2% Fibonacci level of 1.3527 have failed. I am more inclined to believe in a breakout above the 1.3611–1.3633 zone and further growth of the British pound.

The wave structure clearly indicates that the bullish trend remains intact. The last upward wave broke the previous peak, while the last downward wave failed to break the previous low. Bulls may struggle to advance further without new negative news for the dollar. However, the U.S. president is ready to raise tariffs, wage battles over immigration, and apply pressure on China and other tariffed countries. Thus, bulls could find new reasons to attack and push through the 1.3611–1.3633 resistance. A bearish reversal in the trend will only be indicated after a close below the 1.3527 level.

On Monday, neither bulls nor bears received news that could help them exit the 1.3527–1.3533 zone. Bulls continued to push upward by inertia due to the Middle East conflict, but their momentum quickly faded near the strong resistance zone. However, two key economic events later this week could trigger strong market reactions. The FOMC meeting concludes on Wednesday evening, and I expect Jerome Powell to hint at rate cuts in the second half of 2025. This could give bulls the momentum needed to buy the pound more aggressively. On Thursday, the Bank of England will meet, and I expect Andrew Bailey to express doubts about the necessity of rate cuts amid rising inflation and economic uncertainty. This information could also support bullish sentiment.

On the 4-hour chart, the pair consolidated above the 100.0% Fibonacci level of 1.3435 and then rebounded from it. The upward move may continue toward the next corrective level of 127.2% at 1.3795, either following a new rebound from 1.3435 or without it. The bullish trend currently appears solid, but a close below 1.3435 would suggest a decline toward the 76.4% Fibonacci level of 1.3118. In this case, the pair would also break below the "bullish" channel. No emerging divergences are currently visible on any indicators.

Commitments of Traders (COT) Report:

The sentiment of the "Non-commercial" trader category became much more bullish over the last reporting week. The number of long positions held by speculators increased by 7,404, while short positions declined by 9,015. Bears have long lost market control and now have no chance of success. The gap between long and short positions is 51,000 in favor of the bulls: 111,000 vs. 59,000.

In my view, the pound still has room to fall, but recent developments have shifted the long-term outlook. Over the past three months, the number of long positions increased from 65,000 to 111,000, while shorts decreased from 76,000 to 59,000. Under Donald Trump, confidence in the dollar has weakened, and the COT reports show that traders have little desire to buy the greenback. Thus, regardless of the overall news flow, the dollar continues to decline amid developments surrounding Trump.

Economic Calendar for the U.S. and the U.K.:

• U.S. – Retail Sales Change (12:30 UTC)
• U.S. – Industrial Production Change (12:30 UTC)

Tuesday's economic calendar includes two relatively minor entries. The influence of the news backdrop on trader sentiment in the second half of the day is expected to be moderate to weak.

GBP/USD Forecast and Trading Recommendations:

Selling the pair was possible on a rebound from the resistance zone of 1.3611–1.3620, targeting 1.3527. This target may be reached today. Selling is also advisable on a close below the 1.3527 level, targeting 1.3444. Buying is recommended on a rebound from 1.3527 with the target being the 1.3611–1.3633 resistance zone.

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