GBP/USD Forecast: Technical Levels and Fundamental Drivers

The GBP/USD pair demonstrated bullish momentum after rebounding from the 38.2% Fibonacci retracement level at 1.3397 on the hourly chart. Following consolidation above the 1.3454–1.3458 support zone, price action suggests potential for further upside toward the 1.3526–1.3557 resistance band. Conversely, a sustained drop back below 1.3454–1.3458 would open the way for a modest decline back toward 1.3397.

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On the 4-hour chart, the pair has advanced to test resistance between 1.3467 and 1.3482. A rejection from this supply zone would favor the U.S. dollar, driving a decline toward the 50.0% Fibonacci retracement level at 1.3409. A confirmed breakout above 1.3467–1.3482, however, would target the next 23.6% Fibonacci retracement level. Key Fibonacci grids are anchored from 1.3140 to 1.3557 on the hourly timeframe and from 1.3158 to 1.3655 on the 4-hour chart.

Fundamental drivers continue to reflect shifting policy expectations between major central banks. Confidence in ongoing Federal Reserve monetary tightening is gradually easing, whereas market expectations for further rate increases by the Bank of England remain supportive for Sterling. Traders are currently looking ahead to U.S. macroeconomic releases, including the ISM Manufacturing PMI at 14:00 UTC and upcoming employment data.

Geopolitical risks retain a noticeable influence over global market sentiment and energy prices. While the decision to cancel a planned U.S. military action against Iran alleviated immediate fears of military escalation, shipping conditions in the Strait of Hormuz remain constrained. Market participants continue to track potential diplomatic discussions between Washington and Tehran for broader market implications.

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Commitments of Traders (COT) Outlook

The latest Commitments of Traders (COT) report showed a modest increase in bearish positioning among speculative traders. Non-commercial long positions fell by 2,824 contracts, while short positions grew by 6,429 contracts. Total speculative positioning currently stands at approximately 61,000 long contracts versus 126,000 short contracts. Although institutional accounts retain a net-short stance, changing central bank expectations have gradually narrowed the speculative deficit.

GBP/USD Technical Targets and Trading Outlook

From a trading perspective, long positions established following the bounce off 1.3397 remain active after reaching the initial target at 1.3458, with secondary upside targets positioned at 1.3526. Sell setups would become valid upon an hourly close below the 1.3454–1.3458 area, targeting downside objectives at 1.3397 and 1.3348.

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