On the hourly chart, the GBP/USD pair fell on Tuesday to the 127.2% Fibonacci level at 1.3527, rebounded from it, and turned in favor of the pound. This may signal the end of the recent downward movement. Today, growth may continue toward the resistance zone of 1.3611–1.3633. A breakout above this zone would increase the chances of further growth toward the next 200.0% Fibonacci level at 1.3749. A rebound from the resistance zone would allow the dollar to return to 1.3527.

The wave structure suggests that the bullish trend remains intact. The last completed upward wave broke the peak of the previous wave, while the two subsequent downward waves did not reach a new low. Therefore, we are not seeing a trend reversal to bearish but rather a series of corrective waves. Bearish traders still lack reasons to establish their own trend, while the dollar has very few supporting factors. Trump's trade war continues to have a damaging effect on the U.S. currency.

On Tuesday, Donald Trump announced not only a delay in tariff hikes for the European Union but also new tariffs. This time they target imports of copper and pharmaceuticals. The U.S. president now intends to protect domestic producers not only of aluminum and steel but also copper. Accordingly, copper tariffs could be set at 50%. It is not yet clear when they may be introduced. Trump also mentioned plans for 200% tariffs on imported pharmaceuticals but is willing to postpone this step to give producers time to "sort things out." Given the introduction of new tariffs and the limited number of signed trade agreements, I expect another drop in the dollar. However, it's important not to overlook the chart setup—this anticipated decline is based on news sentiment and may unfold later than today. Therefore, close attention should be paid to the chart and trading signals.

On the 4-hour chart, the pair reversed in favor of the U.S. dollar just a few points short of the 127.2% corrective level at 1.3795. Since the drop was unexpected and may end quickly, the hourly chart is more suitable for analysis at the moment. No emerging divergences are visible on any indicator. The bullish trend remains in place.

Commitments of Traders (COT) report:

The sentiment of the "Non-commercial" trader category became slightly less bullish in the latest reporting week. The number of Long positions held by speculators increased by 7,302, while the number of Short positions rose by 10,298. However, bears have long since lost their advantage in the market and have no real prospects for success. The gap between Long and Short positions is 32,000 in favor of bulls: 107,000 vs. 75,000.

In my view, while there is still downward potential for the pound, the events of 2025 have completely shifted the long-term market outlook. Over the past four months, Long positions have increased from 65,000 to 107,000, while Shorts have decreased from 76,000 to 75,000. 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 broader news sentiment, the dollar continues to decline amid developments surrounding Donald Trump.

Economic calendar for the U.S. and the UK:

• U.S. – FOMC Minutes (18:00 UTC)

On Wednesday, the economic calendar contains no major events. As a result, news background will not significantly influence trader sentiment today.

GBP/USD outlook and trading recommendations:

Selling the pair is possible today after a rebound from the 1.3611–1.3633 level, with a target at 1.3527. Buying can be considered if the pair closes above the 1.3611–1.3633 level on the hourly chart, with a target at 1.3749. Buying was also possible following a rebound from the 1.3527 level.

Fibonacci grids are plotted:

• On the hourly chart: from 1.3446 to 1.3139
• On the 4-hour chart: from 1.3431 to 1.2104.