On the hourly chart, GBP/USD continued its upward movement on Wednesday after consolidating above the resistance zone of 1.2788–1.2801 and the 100.0% corrective level at 1.2810. The bulls are now approaching the 1.2931 level, which just yesterday seemed like a distant target. However, the U.S. dollar is falling relentlessly due to Donald Trump's policies and his administration's decisions. For four consecutive days, these actions have weakened the dollar. Bulls won't attack indefinitely, but at this point, there are no technical signals for selling. A consolidation above 1.2931 will increase the likelihood of continued growth toward the next Fibonacci level of 127.2% at 1.3003.

The wave structure is clear. The last completed downward wave did not break below the previous low, while the new upward wave has surpassed the last peak. This confirms the formation of a bullish trend. The pound has been experiencing strong growth lately—perhaps too strong. The fundamental backdrop does not appear robust enough to justify such an uninterrupted rally.

On Wednesday, market sentiment remained unaffected by news. Bank of England Governor Andrew Bailey's calls for a peaceful resolution to trade disputes and the strong ISM Services PMI from the U.S. had no impact on traders. There was a slight negative factor—the ADP employment report in the U.S. came in significantly weaker than expected. However, it's worth noting that there is no direct correlation between ADP data and Nonfarm Payrolls. A weak ADP report does not necessarily mean that NFP will be weak as well. At this point, weak economic data is just adding to an already negative environment for the dollar.

Donald Trump announced a one-month delay in tariffs on Mexican and Canadian automakers. Additionally, some goods will be excluded from the sanctions list. However, this news has little impact. The dollar is in freefall, and any easing of Trump's trade pressure is unlikely to spark a significant recovery in the U.S. currency.

On the 4-hour chart, GBP/USD continues its upward trend, consolidating above the 50.0% Fibonacci level at 1.2861. This supports the potential for further gains toward the next corrective level at 38.2%—1.2994. A strong decline in the pound is unlikely unless there is a confirmed breakout below the ascending channel. No bearish divergences are currently observed on any indicators.

Commitments of Traders (COT) Report

The sentiment among "Non-commercial" traders became less bearish last week. The number of long positions increased by 525, while short positions declined by 4,517. Although bulls have lost some advantage in the market, bears have not significantly increased their positions either. The gap between long and short positions remains minimal: 74,000 versus 69,000.

Despite the pound's recent rally, there are still prospects for a decline. The COT report signals a slow but steady strengthening of bearish positions. Over the past three months, the number of long contracts has decreased from 120,000 to 74,000, while short positions have dropped from 75,000 to 69,000. Over time, professional traders are likely to continue reducing long positions or increasing short positions, as most of the bullish fundamental factors supporting the pound have already been priced in.

The pound has received temporary support from relatively strong UK economic data. However, the current chart analysis continues to indicate an uptrend.

Key Economic Events for the U.S. and the U.K.:

• U.S. – Initial Jobless Claims (13:30 UTC)

On Thursday, the economic calendar includes only one secondary report, meaning the fundamental backdrop is unlikely to significantly influence market sentiment.

GBP/USD Forecast and Trading Recommendations:

Selling opportunities for GBP/USD are possible today if the pair rebounds from the 1.2931 level on the hourly chart, targeting 1.2810. Buying was possible after a close above the 1.2788–1.2801 zone on the hourly chart, with a target of 1.2931. This level is now nearly reached. If the pair consolidates above it, holding long positions toward 1.3003 may be justified.

Fibonacci retracement levels are plotted from 1.2809 to 1.2100 on the hourly chart and from 1.2299 to 1.3432 on the 4-hour chart.