On the hourly chart, the GBP/USD pair reversed in favor of the British pound on Friday and consolidated above the 127.2% Fibonacci level at 1.3258. Thus, on Monday, the upward movement may continue toward the resistance zone of 1.3357–1.3371. A close below 1.3258 would favor the U.S. dollar and could lead to a decline toward the support zone of 1.3114–1.3139.

The wave structure remains "bearish." The most recent upward wave broke through the peaks of the two previous waves, but the latest downward wave also broke through all previous lows. Therefore, the trend can still be considered bearish, although the information background has played a major role in shaping it. If the news flow soon turns against the bears (which already began on Friday), we could see a strong upward wave, and the trend may once again become bullish. The situation is ambiguous and largely dependent on upcoming news.

The news flow on Friday was not only strong but also significant. The U.S. labor market is important to traders not just as an indicator but because it influences the Federal Reserve's monetary policy decisions. On Friday, the official rise in the unemployment rate and disappointing payroll figures over the last three months sharply increased expectations for monetary easing in September. I would remind you that the U.S. dollar has rarely attracted trader interest this year, despite the FOMC keeping rates steady. If the Fed starts cutting rates, it could be yet another "verdict" against the dollar. In the near term, it will be important to determine what the Fed will choose to support: inflation or the labor market? If it opts for inflation, the dollar may resume its upward path, as Friday's data will only have short-term significance. If it prioritizes the labor market, bears may continue retreating from the market. This week, statements from FOMC members will be crucial.

On the 4-hour chart, the pair reversed in favor of the British pound after a bullish divergence formed on the CCI indicator, along with a series of weak U.S. reports. Therefore, the price may continue rising toward the resistance zone of 1.3378–1.3435. Currently, there are no signs of emerging divergences on any indicator. A rebound from the 1.3378–1.3435 zone would favor the U.S. dollar and a renewed decline toward the 76.4% Fibonacci level at 1.3118.

Commitments of Traders (COT) Report:

The sentiment of the "Non-commercial" trader category turned bearish over the past reporting week. The number of long positions held by speculators decreased by 5,961, while the number of short positions increased by 6,637. However, this sharp drop in interest toward the pound, as reflected in the COT reports, does not fully reflect what is happening in the market, since interest in the dollar also declined sharply on Friday. As of now, the gap between long and short positions stands at approximately 87,000 vs. 100,000.

In my view, the pound still faces downward potential. The information background for the U.S. dollar in the first half of the year was dire, but it is gradually starting to improve. Trade tensions are easing, key deals are being signed, and the U.S. economy is set to recover in the second quarter due to tariffs and various investments. At the same time, the potential for Fed policy easing in the second half of the year may still put pressure on the dollar.

Economic Calendar for the U.S. and the U.K.:

On Monday, the economic calendar contains no important entries. Therefore, the news background will not influence trader sentiment today.

GBP/USD Forecast and Trader Recommendations:

Selling the pair is possible today if the hourly chart closes below 1.3258, with a target of 1.3114–1.3139. As for buying the pair, a rebound from the 1.3114–1.3139 zone was needed—which we observed on Friday. These long positions can remain open with a target of 1.3357–1.3371, until the price closes below 1.3258.

The Fibonacci levels are drawn from 1.3371–1.3787 on the hourly chart and from 1.3431–1.2104 on the 4-hour chart.