On the hourly chart, GBP/USD on Friday reversed in favor of the British currency and showed a sharp rise, consolidating above the 76.4% Fibonacci level at 1.3482. Thus, the upward movement of the pound may continue today toward the next 100.0% retracement level at 1.3586. A consolidation of quotes below 1.3482 would favor the U.S. dollar and some decline toward the support level of 1.3416–1.3425.

The wave structure remains "bearish," however strange that may sound after the rather strong growth in recent weeks. The last completed upward wave did not break the peak of the previous wave, while the last downward wave did not break the previous low. The news background played a major role in shaping the waves we have seen in recent weeks. In my view, the news background has already turned the pair in favor of the bulls, so in the near term the trend may once again become "bullish."

On Friday, the news background did not support either the bulls or the bears, but the bulls took control and carried out an important breakout. There were no economic data releases on Friday, but Jerome Powell's speech became a "red flag" for the bulls. The FOMC Chair did not make any promises to cut rates in September; on the contrary, he pointed traders' attention to the importance of the upcoming inflation and labor market data. He only noted that a rate cut would be appropriate under certain conditions (such as further labor market weakness). At the same time, he emphasized the importance of containing inflation, which will continue to be driven higher by Donald Trump's tariffs. Thus, I conclude that monetary policy easing in September is more unlikely than likely. However, traders clearly reached the opposite conclusion. At the moment, the news background diverges somewhat from the logic of price movement. Therefore, I believe that this week's chart analysis will be more useful than trading on the news.

On the 4-hour chart, the pair reversed in favor of the pound after bouncing from the support zone of 1.3378–1.3435. Thus, the upward movement may continue toward the next 127.2% retracement level at 1.3795. In my opinion, the hourly chart is currently more useful for traders. No emerging divergences are observed today in any indicator.

Commitments of Traders (COT) Report:

The sentiment of the "Non-commercial" category of traders became more bullish in the latest reporting week. The number of long positions held by speculators increased by 7,567, while the number of short positions decreased by 6,341. The gap between long and short positions now stands at roughly 81,000 versus 106,000. As we can see, the pound is leaning more toward growth, and traders toward buying.

In my view, the pound still retains prospects for decline. The news background in the first six months of the year for the U.S. dollar was unfavorable, but it is slowly beginning to change for the better. Trade tensions are easing, major deals are being signed, and the U.S. economy will recover in the second quarter thanks to tariffs and various types of domestic investment. At the same time, expectations of Fed monetary policy easing in the second half of the year have already created serious pressure on the dollar. Thus, for now I do not see grounds for a "dollar trend."

News Calendar for the U.S. and UK:

On August 25, the economic calendar contains no noteworthy entries. The news background will have no influence on market sentiment on Monday.

Forecast for GBP/USD and Trading Tips:

Short positions in the pair may be considered today if there is a close below 1.3482, with a target of 1.3416–1.3425. For long positions, a rebound from 1.3482 on the hourly chart is required, with a target of 1.3586.

The Fibonacci grids are built on 1.3586–1.3139 on the hourly chart and 1.3431–1.2104 on the 4-hour chart.