On the hourly chart, the GBP/USD pair on Wednesday rose to the resistance level of 1.3341–1.3352, rebounded from it, reversed in favor of the U.S. dollar, and fell to the support level of 1.3199–1.3214. Today, a rebound of quotes from the 1.3199–1.3214 level will favor the pound and some growth toward 1.3341–1.3352. A consolidation of the pair below the 1.3199–1.3214 level will increase the likelihood of continued decline toward the levels of 1.3139 and 1.3016.

The wave situation has again turned "bearish." The last completed upward wave broke the previous peak by only a few points, while the last downward wave confidently broke the previous low. The news background remains weak for the pound, and geopolitics gives the bears almost total dominance in the market. The war in Iran remains the main reason for the strengthening of the U.S. dollar in recent months. Bulls can only hope for the end of the war in the Middle East, falling oil prices, and a ceasefire by all parties to the conflict.

The news background on Wednesday could have supported bearish traders, but it turned out they received support from Donald Trump overnight. Yesterday, several interesting reports were released in the U.S., which the market ignored. Traders were not interested in stronger retail sales growth or a more positive ISM manufacturing index. Labor market data was also encouraging, though not strongly. The ADP report showed an increase of 62,000 jobs in March, which is above forecasts, but still a relatively low figure overall. However, what difference does it make whether the figure is high or low if there is no reaction? I want to remind you that this situation has been observed in the market for a month or a month and a half. Traders are focused solely on Middle East geopolitics, ignoring all other events. In recent weeks, the geopolitical background has been constantly changing, as Donald Trump makes many contradictory statements—sometimes even within a single speech. The effect on the GBP/USD pair is clearly visible in the chart above.

On the 4-hour chart, the pair consolidated above the descending trend channel, which gave the bulls absolutely nothing. A rebound from the 61.8% corrective level (1.3340) occurred, followed by a reversal in favor of the dollar and the start of a new decline. A consolidation below the 76.4% Fibonacci level (1.3215) will increase the likelihood of further decline toward 1.3044. No emerging divergences are observed in any indicators today.

Commitments of Traders (COT) report:

The sentiment of the "Non-commercial" trader category became even more bearish over the last reporting week. For seven consecutive weeks, non-commercial traders have been actively increasing sales and reducing purchases. The number of long positions held by speculators increased by 2,166, while the number of short positions decreased by 4,927. The gap between long and short positions is now effectively: 46,000 versus 105,000. Bears have dominated in recent weeks, which raises no questions given the geopolitical situation. I still do not believe in a bearish trend for the pound, but now everything depends not on economic indicators, Trump's trade policy, or central bank monetary policy, but on the duration, scale, and consequences of the war in the Middle East.

Over the past year, the pound looked like a safer currency compared to the dollar—more stable and with a clearer economic outlook. However, in recent months, first a correction began while maintaining a bullish trend, and then the conflict in the Middle East started escalating almost daily. Geopolitics remains the only reason for the strengthening of the U.S. dollar.

News calendar for the U.S. and the U.K.:

• U.S. – Initial Jobless Claims (12:30 UTC).

On April 2, the economic calendar contains only one entry, which is of little interest. The impact of the news background on market sentiment on Thursday may be absent.

GBP/USD forecast and trading tips:

Selling the pair was possible after a rebound on the hourly chart from the 1.3341–1.3352 level with a target of 1.3199–1.3214. The target has been reached. New sales are possible after a close below the 1.3199–1.3214 level with targets of 1.3139 and 1.3016. Buying today is possible after a rebound from the 1.3199–1.3214 level with a target of 1.3341–1.3352.

Fibonacci levels are built from 1.3341–1.3866 on the hourly chart and from 1.3012–1.3868 on the 4-hour chart.