On the hourly chart, the GBP/USD pair rebounded from the 76.4% Fibonacci level at 1.3470 on Tuesday, turned in favor of the pound, and rose toward the 61.8% retracement level at 1.3530. A consolidation above this level would support continued growth toward the next Fibonacci level of 50.0% at 1.3579. A rebound from 1.3530 would indicate a possible reversal in favor of the U.S. dollar and a decline toward 1.3470.

The wave structure has shifted in favor of the bulls, as expected. Several downward waves were previously formed, each breaking the low of the previous one. Currently, the latest upward wave has broken through the highs of the previous two, thereby invalidating not just the bearish trend, but even the bearish correction. Based on wave analysis, I now expect further price increases in the near term.

There were no important news releases from the UK on Tuesday, while in the U.S., Jerome Powell delivered a speech. The market's attention is now heavily focused on Powell, as Donald Trump continues to call for interest rate cuts or for Powell to step down. An investigation has been launched into Powell regarding financial irregularities related to the renovation of the Federal Reserve headquarters, prompting some economists to speculate that he may resign voluntarily. Traders were expecting comments on the investigation and possible resignation during yesterday's speech—but received none. Powell also did not provide any new information on potential monetary policy easing, which Trump has been demanding. Thus, the Fed continues to disregard attacks from the U.S. president and remains committed to its current policy and objectives. No significant news is expected today from either the UK or the U.S., but in recent days, the bulls have clearly regained control. Therefore, chart analysis will be key to making trading decisions today.

On the 4-hour chart, the pair generally remains in a downtrend, but after a bullish divergence was formed, it reversed in favor of the pound and rebounded from the support zone of 1.3378–1.3435. This setup indicates a potential resumption of the upward movement toward the 127.2% retracement level at 1.3795. The hourly chart also supports the potential continuation of the bullish trend. Currently, no new divergences are observed on any indicators.

Commitments of Traders (COT) Report:

The sentiment of the "Non-commercial" trader category became slightly less bullish over the last reporting week. The number of long positions held by speculators decreased by 7,039, while short positions fell by 3,036. However, the bears have long since lost their advantage in the market and have little chance of success. The gap between long and short positions stands at 30,000 in favor of the bulls: 101,000 vs. 71,000.

In my view, the pound still faces downside risks, but the events of 2025 have completely shifted the market's long-term direction. Over the past four months, the number of long positions has increased from 65,000 to 101,000, while short positions have dropped from 76,000 to 71,000. The changes are not as dramatic as those in the euro, but they are still notable. Under Donald Trump, confidence in the dollar has weakened, and COT data shows that traders are not eager to buy the dollar. Thus, regardless of the broader news background, the dollar continues to decline amid developments involving Donald Trump.

News Calendar for the U.S. and UK:

• U.S. – Existing Home Sales (14:00 UTC)

The economic calendar on Wednesday contains only this release. The news background is likely to have little or no influence on trader sentiment today.

GBP/USD Forecast and Trader Recommendations:

I do not recommend considering short positions, as the dollar has already overextended its move, in my opinion. Buy positions could have been opened after the rebound from the 1.3357–1.3371 zone with targets at 1.3425 and 1.3470—both targets were achieved. New buying opportunities appeared after a close above 1.3470 with targets at 1.3530 and 1.3579. The first target has already been reached. Further purchases may be considered after a close above 1.3530.

Fibonacci levels are plotted from 1.3371 to 1.3787 on the hourly chart and from 1.3431 to 1.2104 on the 4-hour chart.