On the hourly chart, the GBP/USD pair rebounded from the 50.0% Fibonacci retracement level at 1.3408 on Friday and advanced toward the resistance level of 1.3454–1.3466, where price is currently trading. A consolidation above this zone on Monday would allow traders to anticipate further gains toward the next resistance level at 1.3526–1.3539. A rebound from this zone would favor the U.S. dollar and a decline toward the 50.0% Fibonacci level at 1.3408.

The wave structure remains bearish, as bulls still lack sufficient positive geopolitical developments to launch a sustained advance. The latest completed downward wave broke below the previous low, while the latest upward wave failed to surpass the previous high. Geopolitical developments have recently provided support to bulls; however, the prospects of reaching an agreement between Iran and the United States are once again fading rapidly. The bearish trend can only be considered complete after a breakout above the May 25 high.

The news background was effectively absent on Friday, and remarks by Bank of England Governor Andrew Bailey provided traders with little new information. The market continues to speculate on whether the British regulator may decide to tighten monetary policy in June. The latest inflation report from the United Kingdom does not provide grounds for expecting an interest rate increase. Nevertheless, the pound has been gaining strength over the past several days, which can only be attributed to geopolitical factors.

Geopolitics continues to account for roughly 90% of trader sentiment, but it is not always possible to draw clear conclusions about its future direction. Gains in the pound or the euro imply that the likelihood of an agreement between Iran and the United States is increasing. However, I still do not see any tangible signs that such an event will materialize in the near future. Therefore, the current rise in GBP/USD may prove short-lived.

Today, the U.S. ISM Manufacturing PMI will be released, and it is a sufficiently important and noteworthy report. However, I would not be surprised if the market ignores it as well. Over the weekend, Donald Trump once again sought to reassure markets by stating that an agreement with Iran was close, but he made the same statement the previous weekend.

On the 4-hour chart, GBP/USD has returned to the resistance level of 1.3482–1.3514. Another rebound from this zone would once again favor the U.S. dollar and a moderate decline toward the 23.6% Fibonacci retracement level at 1.3327. However, price movements in the near term will depend on geopolitics rather than chart analysis. Technical analysis should be used only as a supplementary tool. No emerging divergences are currently observed on any indicator.

Commitments of Traders (COT) Report:

Sentiment among the Non-commercial category of traders became slightly less bearish during the latest reporting week. The number of long positions held by speculators decreased by 10,097, while the number of short positions declined by 13,006. The gap between long and short positions now stands at approximately 58,000 versus 119,000. Bears have dominated the market in recent months, which comes as no surprise given the geopolitical situation in the Middle East and the political crisis in the United Kingdom. The bears' advantage currently exceeds a two-to-one ratio.

I still do not believe in a sustained bearish trend for the pound. However, in the near term, market direction will depend not on economic indicators, Trump's trade policy, or central bank monetary policy, but on the duration, scale, and consequences of the conflict in the Middle East. In recent weeks, the market has adjusted to the expectation of a prolonged conflict, but recent developments suggest that a ceasefire may still be achieved, although the process is unlikely to be quick or straightforward.

News Calendar for the United States and the United Kingdom:

• United States – ISM Manufacturing PMI (14:00 UTC).

The economic calendar for June 1 contains only one event that can be considered important. The economic backdrop may influence market sentiment during the second half of Monday's trading session.

GBP/USD Forecast and Trading Tips:

Short positions may be considered today if the pair rebounds from the 1.3454–1.3466 level on the hourly chart, with targets at 1.3408 and 1.3349–1.3355. Long positions were possible after a close above 1.3408, targeting 1.3454–1.3466. This target has been reached. New long positions may be considered after a close above 1.3454–1.3466, with a target at 1.3526–1.3539.

Fibonacci retracement levels are drawn from 1.3158 to 1.3655 on the hourly chart and from 1.3866 to 1.3158 on the 4-hour chart.