On the hourly chart, the GBP/USD pair continued rising on Wednesday after rebounding from the 127.2% Fibonacci retracement level at 1.3258, reaching the resistance zone of 1.3357–1.3371 by the end of the day. A rebound from this zone would favor the U.S. dollar and lead to a decline toward 1.3258. A breakout above this zone would increase the likelihood of continued growth toward 1.3425 and 1.3470.

The wave structure remains "bearish." The most recent upward wave broke above the peaks of the previous two waves, but the most recent downward wave also broke below all previous lows. Therefore, the trend can still be considered bearish. However, the news background has played a major role in shaping this trend. If the news background soon turns against the bears (and this process has already begun), we may see a strong upward wave, and the trend may become bullish again. The situation remains ambiguous and heavily dependent on upcoming news.

On Wednesday, the news backdrop favored the bulls, thanks to new tariff hikes announced by Donald Trump. However, in my view, the bulls have enough reasons to advance even without new tariffs. The tariffs already in place are sufficient to drive further weakness in the U.S. dollar. Additionally, the latest U.S. economic data has been more disappointing than encouraging. Tariffs are having an impact, but not in the way dollar bulls would hope. The economy is growing, but not much else is.

Today, the Bank of England will announce the results of its meeting. A 25-basis-point rate cut is expected. Traders will be closely watching the MPC vote count. If fewer than 8 members vote in favor of a cut—or if there aren't enough votes to pass it—the pound is likely to receive strong support.

On the 4-hour chart, the pair turned in favor of the pound after a bullish divergence on the CCI indicator and a string of weak U.S. data. As a result, the uptrend continues toward the resistance zone at 1.3378–1.3435. As of now, no new divergences are forming on any indicator. A rebound from the 1.3378–1.3435 zone would support the U.S. dollar and potentially lead to a decline toward the 76.4% Fibonacci level at 1.3118. A breakout above this zone would open the path for further pound gains toward 1.3795.

Commitments of Traders (COT) Report:

The sentiment among "Non-commercial" traders turned bearish during the latest reporting week. The number of long positions held by speculators declined by 5,961, while short positions increased by 6,637. However, the sharp drop in interest toward the pound, as seen in the COT report, does not reflect the actual market situation, since interest in the dollar also dropped significantly on Friday. The current gap between long and short positions is about 87,000 vs. 100,000.

In my view, the pound still faces downside risks. The news background for the dollar was overwhelmingly negative during the first half of the year, but it is gradually turning positive. Trade tensions are easing, key agreements are being signed, and the U.S. economy is set to recover in Q2, thanks to tariffs and various forms of investment. At the same time, expectations of monetary policy easing by the Fed in the second half of the year may continue to pressure the dollar.

News Calendar – U.S. and UK:

• UK – Bank of England Interest Rate Decision (11:00 UTC)
• UK – MPC Vote Results (11:00 UTC)
• UK – MPC Monetary Policy Statement (11:00 UTC)
• USA – Initial Jobless Claims Change (12:30 UTC)

Thursday's calendar includes at least three key releases for the UK. As a result, the news background will play a significant role in influencing trader sentiment today.

GBP/USD Forecast and Trading Tips:

Sell positions are possible today in case of a rebound from the 1.3357–1.3371 zone on the hourly chart, with a target at 1.3258. Long positions were previously recommended following a rebound from the 1.3114–1.3139 zone, which occurred on Friday and Monday. These trades should be kept open targeting 1.3357–1.3371. Today, buy positions can be held if the price closes above the 1.3357–1.3371 zone, with targets at 1.3425 and 1.3470.

Fibonacci levels: Drawn from 1.3371 to 1.3787 on the hourly chart and from 1.3431 to 1.2104 on the 4-hour chart.