On the hourly chart, the GBP/USD pair rebounded on Wednesday from the support zone of 1.3357–1.3371 and rose to the 76.4% corrective level at 1.3470. A rebound from 1.3470 led to a reversal in favor of the U.S. dollar and a renewed decline toward the 1.3357–1.3371 zone. A new rebound from this zone would again support the pound and lead to growth toward 1.3425 and 1.3470. A firm move below the 1.3357–1.3371 zone would increase the likelihood of a further decline toward the next Fibonacci level of 127.2% at 1.3259.

The wave structure has shifted in favor of the bears. Several downward waves have formed, each breaking below the low of the previous wave. At the moment, the decline continues, and the pound may breach the key support zone of 1.3357–1.3371. A move below this would definitively establish a bearish trend, as the low from the June 23 wave would be broken. Despite the mixed news background, the bears have regained confidence recently.

Yesterday, the UK released its inflation report, which traders openly ignored. Inflation in the UK increased in June, contrary to traders' expectations. A rise in inflation reduces the likelihood of the Bank of England easing monetary policy in the near term, so a stronger pound would have been the logical market reaction. However, the report was overlooked. Today, several other UK statistics were also published, with two key indicators standing out. The unemployment rate rose from 4.6% to 4.7%, and the number of unemployed increased by 26,000, compared to market expectations of around 18,000. As we can see, two of the most important reports turned out to be weak, triggering renewed bearish pressure. In my view, the market is currently filtering incoming data very selectively and is ignoring many reports. Nevertheless, the chart clearly indicates where the market is headed next. As long as the pair is trading above the 1.3357–1.3371 zone, all is not yet lost for the bulls.

On the 4-hour chart, the pair has turned in favor of the U.S. dollar and continues to decline. This week, it broke below the 100.0% Fibonacci level at 1.3435 and below the ascending trend channel. I remain cautious about declaring a bearish trend, as there is still very little positive news from the U.S. I can allow for a correction, but not a full-fledged bearish trend. Technically, the decline may continue toward the next corrective level of 76.4% at 1.3118.

Commitments of Traders (COT) Report:

The sentiment among the "Non-commercial" trader category became slightly less bullish over the last 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, the bears have long since lost their advantage and stand no chance of success. The gap between long and short positions is 32,000 in favor of the bulls: 107,000 versus 75,000.

In my view, the pound still faces downside risks, but the events of 2025 have completely shifted the market's long-term outlook. Over the past four months, the number of long positions has risen from 65,000 to 107,000, while short positions have fallen from 76,000 to 75,000. Under Donald Trump, confidence in the dollar has weakened, and the COT reports show that traders have little appetite to buy it. Thus, regardless of the general news background, the dollar continues to decline amid the developments surrounding Trump.

News Calendar for the U.S. and the U.K.:

• UK – Unemployment Rate (06:00 UTC)
• UK – Change in Claimant Count (06:00 UTC)
• UK – Average Hourly Earnings (06:00 UTC)
• U.S. – Retail Sales Change (12:30 UTC)
• U.S. – Initial Jobless Claims (12:30 UTC)

Thursday's economic calendar includes five entries, three of which have already been released. The impact of the remaining news on market sentiment for the rest of the day is expected to be limited.

GBP/USD Forecast and Trader Advice:

I do not recommend opening new short positions today, as the dollar has already exceeded its expected move. Long positions can be considered upon a rebound from the 1.3357–1.3371 zone, with targets at 1.3425 and 1.3470. Yesterday, a similar signal brought good profits.

Fibonacci level grids are built from 1.3371–1.3787 on the hourly chart and from 1.3431–1.2104 on the 4-hour chart.