On the hourly chart, the GBP/USD pair on Monday declined to the Fibonacci level of 100.0% at 1.3470, then rebounded and reversed in favor of the British pound. A growth phase began toward the resistance zone of 1.3533–1.3539. A rebound from this zone would work in favor of the US dollar and a renewed decline toward the 1.3470 level. A firm break and consolidation above this zone would increase the likelihood of further growth toward the 127.2% corrective level at 1.3595.
The wave situation has once again turned "bullish" after the completion of a sideways range. The last completed downward wave failed to break the previous low, while the new upward wave managed to break the previous peak. The news background for the pound has been weak in recent weeks, but the informational backdrop in the US also leaves much to be desired. Bulls and bears spent a week in a tug-of-war, remaining in relative balance, but a week before the New Year the bulls launched a new offensive.
There was no news background on Monday, but December data from the US allowed bullish traders to move into a new advance. Due to the holidays, their momentum and activity have faded somewhat, but after the New Year the advance may resume. At this point, it already makes sense to speak about the coming year, as during the current week there will be more holidays than usual. Of course, the market will be open on December 31, but who will be trading on New Year's Eve? Thus, I believe that a sideways market will persist until the end of the year, but if trading signals appear, traders may well be able to work them. The news background will be absent not only today but throughout the entire current week. Only technical (chart) analysis can help traders make trading decisions.
On the 4-hour chart, the pair has consolidated above the 100.0% corrective level at 1.3435, which allows for expectations of continued growth toward the next Fibonacci level of 127.2% at 1.3795. A "bearish" divergence has formed on the CCI indicator, which may trigger a reversal in favor of the US dollar and a return to the support level of 1.3369–1.3435. A rebound from the 1.3435 level would increase the chances of continued growth of the pound.
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 1,649, while the number of short positions decreased by 25,368. The gap between long and short positions now stands at approximately 61,000 versus 110,000. As we can see, bears dominated in December, but the pound appears to have already exhausted its downward potential. At the same time, the situation with euro currency contracts is the exact opposite. I still do not believe in a "bearish" trend for the pound.
In my view, the pound still looks less "dangerous" than the dollar. In the short term, the US currency may occasionally enjoy demand in the market, but not in the long term. Donald Trump's policies led to a sharp deterioration in the labor market, and the Federal Reserve has been forced to ease monetary policy in order to curb 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 toward a more "dovish" one during the year.
News Calendar for the US and the UK:
On December 30, the economic calendar contains no scheduled events. The impact of the news background on market sentiment on Tuesday will be absent.
GBP/USD Forecast and Trader Advice:
Selling the pair was possible after a rebound from the 1.3533–1.3539 level on the hourly chart with a target of 1.3470. The target was reached. If the 1.3470 level is broken, new sell trades can be opened with targets at 1.3437 and 1.3362. I recommended buying on a rebound from the 1.3437–1.3470 level with a target of 1.3533–1.3539. Today, these trades can be kept open.