On the hourly chart, GBP/USD made a small upward move on Friday toward the 100.0% retracement level at 1.3272. A rebound from this level would favor the US dollar and a resumption of the decline toward the 1.3164–1.3177 support level. Consolidation above 1.3272 would allow traders to expect further growth toward the next Fibonacci level of 76.4% at 1.3368.

The market situation remains "bearish." The last completed upward wave failed to break the previous peak, while the new downward wave (which is still forming) broke the previous low. Thus, the bears now have the initiative. FOMC monetary policy tightening and the "hawkish" outlook conveyed by Kevin Warsh have sharply strengthened the dollar. A break in the current trend is now possible only above 1.3567 or after two "bullish" waves have formed.

Friday's fundamental backdrop was quite favorable for the bears to continue their attacks, especially since the bulls had gone on vacation. However, the bears have now taken a pause, allowing us once again to see a move contrary to expectations. Meanwhile, Morgan Stanley presented a report stating that it expects the Bank of England to implement two monetary policy tightenings—in November and February. The Bank of England previously stated that the fundamental backdrop in commodity and raw material markets was not improving, meaning that an extended pause was no longer the base-case scenario. The Bank of England is preparing to begin responding to high inflation and the elevated risks associated with its further increase. Let me remind you that the Fed may also raise interest rates twice during the same period. Economists do not expect more from the US central bank, citing weakness in the labor market and the temporary impact of high energy prices and import tariffs on inflation. Thus, by spring 2027, both central banks may carry out two rounds of tightening, which currently provides support only to the dollar. Traders continue to ignore policy tightening in the UK. At present, the bulls do not know what to rely on and are counting on weak US economic data this week. For now, they have little else to rely on.

On the 4-hour chart, GBP/USD consolidated below the 76.4% retracement level at 1.3277, allowing traders to expect a continuation of the decline toward the next Fibonacci level of 100.0% at 1.3159. However, a "bullish" divergence on the CCI indicator allows for a possible return to 1.3277. A rebound from this level would again allow traders to expect a decline toward the 100.0% retracement level at 1.3159.

Commitments of Traders (COT) Report:

The sentiment of the "Non-commercial" trader category became even more "bearish" over the latest reporting week. The number of Long positions held by speculators decreased by 14,876, while the number of Short positions increased by 8,977. The current gap between Long and Short positions is effectively 54,000 versus 137,000. The gap and the bears' advantage are increasing again. Previously, the bears' dominance raised no questions, but it does now because the fundamental backdrop has changed in recent months.

I still do not believe in a "bearish" trend for the pound, but in the near term, everything will depend on Trump's trade policy, the monetary policies of the Fed and the Bank of England, as well as the duration, scale, and consequences of the war in the Middle East. In recent months, the market has repositioned itself toward peace, but negotiations between Iran and the United States failed without really getting started. And there is no guarantee that they will resume in the near future.

News Calendar for the US and UK:

On September 28, the economic calendar contains no noteworthy events. The economic backdrop will have no impact on market sentiment on Monday.

GBP/USD Forecast and Trading Tips:

Selling the pair was possible after consolidation below 1.3272 on the hourly chart, with a target of 1.3177. These trades can remain open. Buying is possible today following a rebound from the 1.3164–1.3177 level, with a target of 1.3272.

The Fibonacci level grids are drawn from 1.3272–1.3674 on the hourly chart and from 1.3158–1.3655 on the 4-hour chart.