The wave picture has shifted to "bearish." This happened suddenly and unexpectedly. The last completed upward wave broke the previous peak, but the last downward wave easily broke the previous low. Last week's news background was mostly neutral for the pound, but Thursday and Friday spoiled the picture. However, that background has already been priced in by traders, and on what basis do bears plan to continue their attacks?

Yesterday could have been a very interesting day for the pound, while today could be more relevant for the dollar. On Monday, speeches were delivered by Bank of England Chief Economist Huw Pill and Governor Andrew Bailey. Yet both central bankers provided no new or noteworthy information. Today, Federal Reserve Chair Jerome Powell will speak, and the outcome may be the same. Currently, there is no intrigue regarding the monetary policies of either the Fed or the Bank of England. Both central banks held meetings last week that made their policy direction clear. Therefore, I do not expect Powell to deliver any market-moving information today. Thus, the most interesting events of the day will be the PMI releases in both the US and the UK. In my view, bears squeezed the most out of last week's setup. Despite the wave transformation into a "bearish" trend, I believe this trend could end as quickly as it started.

On the 4-hour chart, the pair reversed in favor of the US dollar after forming a "bearish" divergence on the CCI indicator and following the BoE and Fed meetings. The downward move is currently continuing toward the support zone of 1.3378–1.3435. A rebound from this zone will favor the pound and some growth of the pair. A break below this zone will support further decline toward the 76.4% retracement level – 1.3118.

Commitments of Traders (COT) report:

Sentiment of the "Non-commercial" trader category turned sharply more "bullish" in the last reporting week. The number of long positions held by speculators rose by 5,947, while short positions fell by 21,078. The gap between long and short positions now stands at roughly 80,000 versus 87,000. Bullish traders are once again tipping the balance in their favor.

In my opinion, the pound still faces prospects of decline. The news background during the first six months of the year was disastrous for the US dollar, but it is gradually improving. Trade tensions are easing, major deals are being signed, and the US economy is set to recover in Q2 thanks to tariffs and investment flows. At the same time, the Fed's policy easing expectations in the second half of the year are putting significant pressure on the dollar, with the US labor market weakening and unemployment rising. Thus, I currently see no grounds for a sustained "bearish" trend.

News calendar for the US and UK:

• UK – Manufacturing PMI (08:30 UTC).
• UK – Services PMI (08:30 UTC).
• US – Manufacturing PMI (13:45 UTC).
• US – Services PMI (13:45 UTC).
• US – Speech by FOMC Chair Jerome Powell (16:35 UTC).

On September 23, the economic calendar includes five events. The news background will influence market sentiment throughout Tuesday, particularly in the evening.

GBP/USD forecast and trader advice: Selling the pair is possible today if it closes below 1.3482 on the hourly chart, with a target at the 1.3416–1.3425 zone. Buying could be considered on a close above 1.3482 on the hourly chart with a target at 1.3587. These trades can currently be kept open.

Fibonacci grids are drawn from 1.3586–1.3139 on the hourly chart and from 1.3431–1.2104 on the 4-hour chart.