On the hourly chart, the GBP/USD pair rebounded from the 1.3268–1.3277 resistance level, reversed in favor of the U.S. dollar, and declined almost to the 1.3158–1.3177 support zone. A rebound from this zone on Wednesday would favor the pound and support a moderate recovery toward the 1.3268–1.3277 level. Consolidation below the 1.3158–1.3177 level would increase the likelihood of a further decline toward the next Fibonacci level of 127.2% at 1.3025.

The wave structure turned bearish again following the FOMC meeting. The latest completed downward wave broke below the previous low, while the latest upward wave failed to exceed the previous peak. It is difficult to say how much strength the bears have left this time, but the dollar's fundamental support does not appear particularly convincing. If we set the wave structure aside, the bears continue to maintain full control of the market. However, with the conflict in the Middle East appearing to be winding down, the dollar is unlikely to enjoy sustained long-term growth.

Tuesday's news backdrop supported the bears. UK business activity indices for both the services and manufacturing sectors came in below expectations, triggering a decline in the pound during the first half of the day. However, did the pound really deserve to fall throughout the entire session? In the case of the euro, one could argue that comments from Christine Lagarde influenced market sentiment, but that was not the case for the pound. The week began with gains for sterling amid reports of Keir Starmer's resignation. However, as it turned out, bullish optimism was short-lived. By Tuesday, the pound had already surrendered all of Monday's gains.

What happens next is difficult to determine based solely on the current news flow. In my view, the fundamental backdrop is not negative enough for either the euro or the pound to justify a one-sided decline without meaningful corrections. Nevertheless, the market continues to show persistent bearish pressure. Therefore, trading decisions should be based primarily on the technical picture. If the bears manage to break below the 1.3158–1.3177 level today, the subsequent scenario will be fairly straightforward. No major economic releases are scheduled today, while geopolitical developments suggest that Iran and the United States are moving toward dialogue. However, the market no longer appears to be using the simple equation of "geopolitics = trading decisions."

On the 4-hour chart, the GBP/USD pair has returned to the 100.0% corrective level at 1.3159. A rebound from this level would favor the pound and support renewed growth toward the 76.4% Fibonacci level at 1.3277. Consolidation below 1.3159 would allow traders to expect a continuation of the decline toward the 1.3025–1.3044 support level. No emerging divergences are currently visible on any indicator.

Commitments of Traders (COT) Report:

Sentiment among the Non-commercial category became more bearish during the latest reporting week. The number of long positions held by speculators decreased by 3,700, while the number of short positions increased by 3,672. The gap between long and short positions now stands at approximately 42,000 versus 114,000. Bears have dominated the market for several months. However, while this dominance previously seemed fully justified, it is now becoming less clear given the significant shift in the fundamental backdrop. The bears' advantage is now nearly threefold.

I still do not believe in a long-term bearish trend for the pound. However, in the near term, market direction will depend less on economic data, Trump's trade policy, or central bank monetary policy, and more on the duration, scale, and consequences of the conflict in the Middle East. In recent weeks, the market has shifted toward expectations of peace, but negotiations between Iran and the United States could prove lengthy and complex.

News Calendar for the United States and the United Kingdom:

• United States – New Home Sales (14:00 UTC).

The economic calendar for June 24 contains only one secondary event. As a result, the impact of the economic backdrop on market sentiment on Wednesday is expected to be negligible.

GBP/USD Forecast and Trading Tips:

Short positions were possible after a rebound from the 1.3268–1.3277 resistance level on the hourly chart, targeting the 1.3158–1.3177 level. That target has already been almost reached. New short positions may be considered after a close below the 1.3158–1.3177 level, with a target of 1.3025. Long positions may be considered after a rebound from the 1.3158–1.3177 level, targeting the 1.3268–1.3277 level.

The Fibonacci grids are constructed from 1.3158 to 1.3655 on both the hourly and 4-hour charts.