On the hourly chart, GBP/USD posted a slight decline on Monday, but by Tuesday morning, the pair had returned to the 200.0% Fibonacci retracement level at 1.3749. A new rebound from the 1.3749 Fib level will once again favor the US dollar and trigger a moderate decline toward the support zone at 1.3611–1.3633. A consolidation above 1.3749 would increase the likelihood of continued growth toward the next level at 1.3845.

Wave analysis suggests the bullish trend remains in play. The most recent completed downward wave broke the previous low by just a few points, while the new upward wave easily surpassed the previous high. Bearish traders are once again retreating, as the Middle East conflict has subsided and the US dollar continues to lack strong support. Trump's trade war is still having a detrimental effect on the US currency.

On Monday, the UK GDP report was largely ignored by traders, but by the end of the day it emerged that Donald Trump had now shifted his pressure toward Japan. According to the US president, Japan is unwilling to buy American rice, despite having a domestic rice shortage. Trump expressed dissatisfaction with Tokyo's stance and is preparing to raise tariffs on the country. He also noted that negotiations with the Japanese are ongoing and that America would be happy to have such a trade partner for years to come—but only if Japan trades on terms Trump deems appropriate. In just a week, the deadline for trade talks with many countries will expire. Trump has threatened to restore initial tariff levels for countries with which deals are not reached. In my view, it will be impossible to secure agreements with all parties, and the market seems to understand this already. As a result, bulls continue to push forward while the dollar continues its free fall.

On the 4-hour chart, the pair is still advancing toward the 127.2% retracement level at 1.3795. A close above this level would support further growth toward the next target at 1.4020. A rebound from the 1.3795 level would favor the US currency and lead to a moderate pullback within the still-valid ascending trend channel. There are currently no emerging divergences on any indicator.

Commitments of Traders (COT) Report:

The sentiment of the "Non-commercial" trader category became less bullish over the past reporting week. The number of long positions held by speculators declined by 6,434, while short positions increased by 2,028. However, bears have long lost their advantage in the market and stand no chance of success. The gap between long and short positions is 35,000 in favor of the bulls: 100,000 versus 65,000.

In my view, the British pound still has room for a downward correction, but the events of 2025 have completely shifted the market in the long term. Over the past three months, the number of long positions has increased from 65,000 to 100,000, while shorts have dropped from 76,000 to 65,000. Under Donald Trump, confidence in the dollar has weakened, and the COT reports show that traders lack the desire to buy the dollar. Thus, regardless of the general news background, the dollar continues to decline amid the developments surrounding Donald Trump.

Economic Calendar for the US and UK:

• United Kingdom – Manufacturing PMI (08:30 UTC)
• United Kingdom – Speech by Bank of England Governor Andrew Bailey (13:30 UTC)
• United States – Speech by FOMC Chair Jerome Powell (13:30 UTC)
• United States – ISM Manufacturing PMI (14:00 UTC)
• United States – JOLTS Job Openings (14:00 UTC)

Tuesday's economic calendar includes five entries, several of which are of high importance. The news background will influence trader sentiment throughout the day.

GBP/USD Forecast and Trading Recommendations:

Selling opportunities may arise today if the pair rebounds from the 1.3749 level, with a target at 1.3611–1.3633. I previously recommended buying if the pair closed above the 1.3425–1.3444 level, targeting 1.3527, the 1.3611–1.3633 zone, and the 1.3749 level. All targets have been met, and a consolidation above 1.3749 would open the door for new long positions toward 1.3845.

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