On the hourly chart, the GBP/USD pair advanced toward the 1.3454–1.3457 resistance level on Tuesday but failed to test it. Today, a new upward move toward this zone has begun. A rebound from the zone would favor the U.S. dollar and a moderate decline toward the 76.4% Fibonacci retracement level at 1.3382. Consolidation above the 1.3454–1.3457 level would increase the likelihood of further gains toward the next resistance level at 1.3526–1.3543.
The wave structure remains bullish. The latest completed downward wave broke below the previous low, while the latest upward wave exceeded the previous peak. Thus, the bulls continue to dominate the market. In my view, the bearish impulse that began in 2026 has already ended, and only geopolitical developments could prevent the bulls from extending their advance. However, at this stage, geopolitical risks are likely to trigger only a corrective pullback.
Tuesday's news backdrop was highly eventful but unfavorable for the U.S. dollar. The key release was the U.S. inflation report, which came in weaker than traders had expected. At the same time, FOMC Chairman Kevin Warsh, speaking before the U.S. Congress, stated that inflation remains too high and that the Federal Reserve must take action. He did not specify what measures the regulator intends to take or how the Fed's monetary policy plans align with current geopolitical developments. Many analysts believe inflation could return to the Fed's 2% target without aggressive policy tightening, provided that Iran and the United States resume negotiations and reopen the Strait of Hormuz, allowing oil prices to decline again. Whether this will happen remains uncertain, but such a scenario cannot be ruled out. This raises the key question: how long is the Federal Reserve prepared to wait before beginning monetary policy tightening? Traders do not expect an interest rate hike in July, but the FOMC could vote in favor of tightening as early as September.
On the 4-hour chart, GBP/USD rebounded from the 61.8% Fibonacci retracement level at 1.3348, reversed in favor of the pound, and advanced toward the 50.0% Fibonacci level at 1.3409 after bullish divergences formed on both the RSI and CCI indicators. Today, a rebound from the 1.3409 level would suggest a moderate decline in the pair, while consolidation above this level would signal continued growth toward the 1.3467–1.3482 resistance level. No new developing divergences are currently observed.
Commitments of Traders (COT) Report:
Sentiment among the Non-commercial group became less bearish over the latest reporting week but remains bearish overall. The number of Long positions held by speculative traders increased by 7,415, while the number of Short positions declined by 6,829. The current balance between Long and Short positions stands at approximately 45,000 versus 132,000. Bears have dominated the market in recent months. While this dominance previously seemed fully justified, the significant shift in the fundamental backdrop has made it increasingly questionable. Even so, bearish positions still outnumber bullish ones by nearly three to one.
I still do not believe in a sustained bearish trend for the pound. However, in the near term, market direction will depend less on economic data, Trump's trade policy, or central bank monetary policy than on the duration, scale, and consequences of the conflict in the Middle East. In recent weeks, the market has become more optimistic about the prospects for peace, but negotiations between Iran and the United States could prove lengthy and difficult. There is also no guarantee that they will conclude with the signing of a nuclear agreement.
News Calendar for the United States and the United Kingdom:
United States
- Producer Price Index (12:30 UTC)
- Speech by Federal Reserve Chairman Kevin Warsh (14:00 UTC)
The economic calendar for July 15 contains two scheduled events, one of which I consider particularly important. As a result, macroeconomic developments may influence market sentiment on Wednesday.
GBP/USD Forecast and Trading Tips:
Short positions may be considered today if the pair rebounds from the 1.3454–1.3457 resistance level on the hourly chart, with downside targets at 1.3382 and 1.3335. Long positions became valid after a close above the 1.3382 level, targeting the 1.3454–1.3457 resistance level. These positions may still be held today. New long positions may be considered after a confirmed close above the 1.3454–1.3457 level.
Fibonacci retracement levels are plotted from 1.3457 to 1.3139 on the hourly chart and from 1.3158 to 1.3655 on the 4-hour chart.
