On the hourly chart, the GBP/USD pair dropped to the 1.3425 level on Thursday, then rebounded and reversed in favor of the British pound. This initiated a growth process toward the Fibonacci 161.8% level at 1.3520. A rebound from this level would favor the U.S. dollar and the resumption of a decline toward 1.3425. However, a consolidation above 1.3520 would open the door for continued growth toward the next target at 1.3620.

The wave structure clearly indicates that the bullish trend remains intact. The last upward wave broke the previous peak, and the new downward wave has yet to break the previous low and is still incomplete. Bulls find it difficult to expect further growth without new messages from Donald Trump about additional tariffs. Meanwhile, the story of the tariff cancellation has quickly become history — tariffs remain in place.

Thursday's news flow was enough to "blow anyone's mind." First, the U.S. Federal Court canceled Trump's tariffs, then immediately suspended its decision for 14 days. After reviewing Trump's appeal, the court cited national security concerns and delayed the tariff repeal for two weeks. Why exactly 14 days and what is expected to change during this time was not explained. Most likely, Trump, in his signature style, pressured the judges, who quickly changed their stance on the law. Either way, tariffs remain in effect. The Trump administration declared that the president would not back down from his new trade policy and that the court's decision was just a temporary obstacle. National Economic Council Director Kevin Hassett stated that within a few months, everyone would see countries opening their markets to U.S. goods, removing all trade barriers and tariffs. However, dollar bulls were not particularly excited about the fact that tariffs are staying.

On the 4-hour chart, the pair consolidated above the Fibonacci 100.0% level at 1.3435. Therefore, the growth process could resume toward the next corrective level at 127.2% — 1.3795, provided there's a rebound from 1.3435. There are no emerging divergences in any indicators today. The bullish trend remains unquestioned, but a close below 1.3435 would suggest a decline toward the 76.4% retracement level at 1.3118.

Commitments of Traders (COT) Report:

The sentiment of the "Non-commercial" trader category hasn't changed much over the last reporting week. The number of long positions among speculators decreased by 1,396, while the number of short positions increased by 1,827. Bears have long since lost their advantage in the market. The gap between longs and shorts now stands at 24,000 in favor of the bulls: 88,000 against 64,000.

In my view, the pound still faces downward prospects, but recent developments are reshaping the market in the long term. Over the past three months, the number of long positions has grown from 65,000 to 88,000, while short positions have decreased from 76,000 to 64,000. Under Donald Trump, faith in the dollar has wavered, and COT reports show that traders have little appetite for buying dollars. Thus, no matter how the general news background looks, the dollar continues to fall amid Trump's actions.

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

• U.S. — PCE Price Index (12:30 UTC)
• U.S. — Personal Income and Spending (12:30 UTC)
• U.S. — University of Michigan Consumer Sentiment Index (14:00 UTC)

On Friday, the economic calendar includes three key events, but throughout the day, traders are likely to continue reacting to the story of the tariffs' cancellation and the cancellation of their cancellation. The impact of the news flow on traders' sentiment could be very strong today.

Forecast for GBP/USD and Trading Recommendations:

Sales were possible upon a close below 1.3520 on the hourly chart with a target of 1.3425, and that target has been achieved. Today, a bounce from 1.3520 would allow for new selling opportunities with targets at 1.3425 and 1.3344–1.3357. Buying opportunities were available on a bounce from 1.3425. Today, new long positions will become possible on a close above 1.3520, with a target of 1.3620.

Fibonacci levels are drawn based on 1.3205–1.2695 on the hourly chart and 1.3431–1.2104 on the 4-hour chart.