On the hourly chart, the GBP/USD pair continued to move sideways on Friday, fluctuating between the levels of 1.3205 and 1.3344. Following a rejection from the resistance zone of 1.3344–1.3357, there's still a chance of a further decline toward the 100.0% Fibonacci level at 1.3205. However, on the 4-hour chart, sideways movement has been ongoing for over a month now. At this moment, neither the bulls nor the bears have the upper hand.

The wave scenario has become more complex after the latest bullish attack. The last completed upward wave broke above the previous peak, but the most recent downward wave also broke the prior low. This indicates a possible transition from a bearish trend to a bullish one. Bulls will have a hard time pushing above the 1.3425 level without new announcements from Donald Trump regarding increased or new import tariffs. Meanwhile, recent price action shows bears aren't having an easy time either. I believe the latest upward wave is more of a fluke, and the 1.3344–1.3357 zone will offer strong resistance.

On Friday, the UK had no economic data releases, while three reports came out in the U.S., none of which supported the bears. The bears made a brief push during the day, but bulls controlled the rest of the session. Overall, the pair remains range-bound. The sparse news flow had little impact on either the pound or the dollar. Trader sentiment is unlikely to change on Monday, as there are no scheduled economic releases. For the rest of the week, data will also be limited, and the pair has been trading sideways for a month. This means the only potential catalyst for traders may come from news on trade wars.

Let me remind you that out of Trump's three-month grace period on tariff rates, half the time has already passed. So within the next six weeks, either Trump will raise tariffs back to their original levels for nearly 80 countries (as currently, only one deal has been signed), or we'll see a flurry of new trade agreements. The first scenario favors the bears, the second the bulls.

On the 4-hour chart, the pair has bounced off the 100.0% Fibonacci level at 1.3435 and turned in favor of the U.S. dollar, suggesting potential for a decline toward the 76.4% retracement level at 1.3118. However, in recent weeks we've seen more consolidation than downside momentum. No indicators are currently showing any signs of divergence. The ascending trend channel still points to a bullish trend. Only a firm break below the channel will indicate the possibility of a global reversal.

Commitments of Traders (COT) Report:

The sentiment among "Non-commercial" traders became slightly less bullish over the past reporting week. Long positions decreased by 4,844 contracts, while short positions declined by 2,825. Bears have long lost their market advantage. The gap between long and short positions now stands at 27,000 in favor of the bulls: 89,000 vs. 62,000.

In my opinion, the pound still faces downside risk, but recent developments could trigger a long-term market reversal. Over the past three months, long positions rose from 65,000 to 92,000, while short positions dropped from 76,000 to 62,000. Under Donald Trump, confidence in the U.S. dollar has weakened, and COT reports show that traders are reluctant to buy the greenback aggressively.

Economic Calendar for the U.S. and UK:

Monday: No scheduled economic events. The news backdrop is expected to have no effect on trader sentiment during the day.

GBP/USD Forecast and Trading Tips:

Selling the pair was possible after a rejection from the 1.3344–1.3357 zone on the hourly chart with targets at 1.3265 and 1.3205. Today, the same strategy applies: consider selling upon rejection from this resistance zone. Buying opportunities may be considered if the pair closes above 1.3344–1.3357 with a target of 1.3425.

Fibonacci grids are drawn from 1.3205 to 1.2695 on the hourly chart and from 1.3431 to 1.2104 on the 4-hour chart.