On the hourly chart, the GBP/USD pair continued rising on Tuesday, although bulls slightly pulled back, allowing the pair to consolidate below the 200.0% corrective level at 1.3749. However, this sell signal did not lead to a decline, as bears still show no intention of taking control. The reason is the lack of a supportive news background. Even yesterday, despite fairly positive US data, the dollar failed to strengthen. A new consolidation above 1.3749 would support further growth toward the next level at 1.3845.

The most recent downward wave broke the previous low by only a few points, while the new upward wave easily surpassed the prior peak a week ago and continues to form. Bearish traders are once again retreating, as the Middle East conflict has de-escalated, and the dollar still lacks strong support factors. Trump's trade war continues to negatively impact the US currency.

On Tuesday, the US released two reports that had limited potential to boost bearish sentiment ahead of Friday. The market awaits key reports on the US labor market and unemployment at the end of the week. Yesterday, it was revealed that the ISM manufacturing PMI continued to recover and reached 49. Meanwhile, the number of job openings in May came in at 7.7 million, exceeding expectations of 7.3 million. Both reports could have supported dollar bulls, but no selling momentum followed. I believe the pair may consolidate above 1.3749 today, and bulls are unlikely to stay on the sidelines for long.

On the 4-hour chart, the pair continues rising toward the 127.2% corrective level at 1.3795. A close above this level would open the path for further growth toward 1.4020. A rebound from 1.3795 would favor the US dollar and trigger a short-term pullback within the existing upward trend channel, which remains valid. A potential bearish divergence is forming on the RSI, which could coincide with a rejection from 1.3795.

Commitments of Traders (COT) Report:

Sentiment among the "Non-commercial" trader category became slightly less bullish in the latest reporting week. The number of long positions held by speculators decreased by 6,434, while short positions increased by 2,028. However, bears lost market control long ago and currently have no real chance of regaining it. The gap between long and short positions remains significant—100,000 vs. 65,000 in favor of the bulls.

In my view, the pound still has room to decline, but the developments of 2025 have reversed the long-term market trend. Over the past three months, the number of long positions increased from 65,000 to 100,000, while short positions dropped from 76,000 to 65,000. Under Donald Trump, confidence in the dollar has weakened, and COT reports show that traders are not willing to buy it. Therefore, regardless of the broader news background, the dollar continues to decline due to events surrounding Trump.

News Calendar for the US and UK:

US – ADP Employment Change (12:15 UTC)

The economic calendar for Wednesday includes only one notable event. The influence of the news background on market sentiment will be minimal throughout the day.

GBP/USD Outlook and Trading Recommendations:

Selling opportunities may arise today if the pair rebounds from the 1.3749 level, with a target of 1.3611–1.3633, or from 1.3795 on the 4-hour chart.I previously recommended buying the pair after a breakout above the 1.3425–1.3444 zone, with targets at 1.3527, 1.3611–1.3633, and 1.3749. All those targets have been met. A new consolidation above 1.3749 would open the door for long positions with a target of 1.3845.

Fibonacci levels are based on the 1.3446–1.3139 range on the hourly chart and 1.3431–1.2104 on the 4-hour chart.