The wave situation has once again turned "bullish" after the completion of a sideways movement. The last completed downward wave failed to break the previous low, while the new upward wave managed to break the previous high. The news background for the British pound has been weak in recent weeks, but the information background in the United States also leaves much to be desired. For a week, bulls and bears were locked in a tug-of-war and remained in relative balance, but a week before the New Year, the bulls launched a new offensive.

The news background on Tuesday did not encourage new attacks by the bulls—or at least it was not unambiguous. To begin with, the growth process started back on Monday, when the only event of the day was the UK GDP report, which showed a rather mediocre figure. On Tuesday, before the release of U.S. reports, the British pound continued to rise while the dollar declined. The reports themselves on durable goods orders, industrial production, and GDP had virtually no impact on the current chart picture. We saw a corrective pullback on the statistics, but then the bulls continued to push their agenda. In my view, the U.S. dollar will continue to decline in 2026, but even in 2025 its fall may not yet be complete. Although America is not experiencing problems with economic growth, it is facing serious issues with the labor market, industrial production, and political stability.

On the 4-hour chart, the pair managed to consolidate above the 100.0% corrective level at 1.3435. Thus, the growth process may continue toward the next Fibonacci level of 127.2% at 1.3795. A bearish divergence is forming on the CCI indicator, which could trigger a reversal in favor of the U.S. dollar.

Commitments of Traders (COT) Report:

The sentiment of the "Non-commercial" category of traders became more bullish over the last reporting week. The number of long positions held by speculators increased by 8,067, while the number of short positions rose by 3,402. The gap between the number of long and short positions is currently effectively as follows: 60 thousand versus 135 thousand. As we can see, bears have dominated since the beginning of December, but the British pound appears to have already exhausted its downside potential. At the same time, the situation with positions on the euro currency is directly opposite. I still do not believe in a bearish trend for the pound.

In my opinion, the pound still looks less "dangerous" than the dollar. In the short term, the U.S. currency occasionally enjoys demand in the market, but I believe this is a temporary phenomenon. Donald Trump's policies have led to a sharp deterioration in the labor market, and the Federal Reserve is forced to ease monetary policy in order to stop the rise in unemployment and stimulate the creation of new jobs. For 2026, the FOMC does not plan significant monetary easing, but at the moment no one can be certain that the Fed's stance will not shift to a more dovish one during the year.

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

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

On December 24, the economic calendar contains only one minor entry. The impact of the news background on market sentiment on Wednesday will be extremely weak or absent.

GBP/USD Forecast and Trading Advice:

Selling the pair today is possible on a rebound from the 1.3533–1.3539 level on the hourly chart, with a target at 1.3470. I previously recommended buying on a rebound from the 1.3352–1.3362 level with targets at 1.3425, 1.3470, and 1.3539. All targets except the last one have been reached. Today, long positions can be kept open with a target at 1.3595 if the price manages to close above the 1.3539 level.

The Fibonacci grids are drawn from 1.3470–1.3010 on the hourly chart and from 1.3431–1.2104 on the 4-hour chart.