On the hourly chart, the GBP/USD pair on Thursday rebounded from the 1.3520 level, surged to the resistance zone of 1.3611–1.3620, bounced off it twice, and then fell back to the 127.2% Fibonacci retracement level at 1.3527. A rebound from this level will again support the pound and suggest further growth toward the 1.3611–1.3620 level. A close below 1.3527 would increase the likelihood of continued decline toward the 100.0% retracement level at 1.3444.

The wave pattern clearly indicates a continuing "bullish" trend. The last upward wave broke above the previous wave's peak, and the last downward wave failed to break the previous low. Bulls will have a hard time pushing for further gains without new negative news for the dollar, but the U.S. president remains ready to raise tariffs, confront immigration, and pressure China and other countries facing tariffs. Thus, bulls have reason to stay active — but they need new catalysts. The "bullish" trend will be considered invalidated only after a close below 1.3455.

On Thursday, bears received long-awaited support from an unexpected direction. The conflict between Iran and Israel reignited after Israel launched strikes on nuclear and military facilities. Israel expects retaliation and has declared a state of emergency. Defense Minister Israel Katz stated that Iran possesses enough enriched uranium to build several nuclear bombs within days. Therefore, Israel felt compelled, for national security reasons and in the face of ongoing hostilities, to launch a preemptive strike.

The U.S. also supports limiting Iran's nuclear capabilities, fearing potential escalation. While nuclear negotiations between the U.S. and Iran are ongoing, they've dragged on for years. Iran refuses to give up its nuclear weapons, viewing them as a defensive measure, while other countries view them as a potential offensive threat. Amid this renewed military escalation, the U.S. dollar has resumed strengthening.

On the 4-hour chart, the pair consolidated above the 100.0% Fibonacci level at 1.3435 and bounced from it from above. This suggests the potential for further growth toward the 127.2% level at 1.3795, either after another rebound from 1.3435 or directly. The bullish trend remains intact for now, but a close below 1.3435 would shift expectations toward a drop to the 76.4% level at 1.3118. No new divergences are currently forming on any indicator.

Commitments of Traders (COT) Report

Sentiment among the "Non-commercial" trader category was unchanged last week. The number of long positions held by speculators increased by 1,281, while short positions rose by 1,445. Bears have long since lost their advantage in the market. The gap between long and short positions stands at 35,000 in favor of the bulls: 103,000 vs. 68,000.

In my opinion, the pound still faces downside risks, but recent events have shifted the market in the long term. Over the past three months, the number of long positions has risen from 65,000 to 103,000, while short positions have decreased from 76,000 to 68,000. Under Donald Trump, confidence in the dollar has weakened, and COT reports indicate that traders are reluctant to buy the U.S. currency. Regardless of the broader news context, the dollar continues to fall amid developments surrounding Trump.

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

• U.S. – University of Michigan Consumer Sentiment Index (14:00 UTC)

On Friday, the economic calendar includes only one relatively insignificant entry. The influence of economic data on trader sentiment will likely be minimal for the rest of the day. However, expect numerous updates related to the Iran–Israel conflict and Trump's tariff policies.

GBP/USD Forecast and Trader Tips:

Short positions were valid after the rebound from the 1.3611–1.3620 resistance zone, with targets at 1.3527 and lower. Today, selling is possible after a close below 1.3527 with a target at 1.3444. Buying is recommended after a rebound from the 1.3527 level, targeting the resistance zone of 1.3611–1.3633.

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