On the hourly chart, the GBP/USD pair continued its upward movement on Monday and consolidated above the 50.0% retracement level at 1.3404. Thus, the bulls may make another attempt today to move toward the resistance level of 1.3454–1.3469. Consolidation below the 50.0% level would favor the US dollar and a potential decline toward the 38.2% Fibonacci level at 1.3342.

The market situation remains bullish. The latest completed downward wave failed to break the previous low, while the new upward wave broke above the previous high. Thus, the bulls continue to control the market. The FOMC's monetary policy tightening and the hawkish outlook communicated by Kevin Warsh supported the dollar for a month. The bulls are currently dominating the market, as the Bank of England may begin its monetary policy tightening cycle this week.

The news background on Monday was interesting. Apart from the US ISM Manufacturing PMI, all other news concerned either elections or geopolitics. For example, Donald Trump and Marco Rubio stated that Iran and the United States might hold new peace talks in the near future, and Iranian President Masoud Pezeshkian confirmed this information. Oil prices immediately plunged following these reports, but the US dollar showed no significant decline, although it could have weakened given the reduction in geopolitical tensions. However, in my view, geopolitical factors have not had a significant impact on currency traders' sentiment for quite some time. Who would be surprised by another escalation in the Middle East at this point? Moreover, on Monday, the United States once again attacked Iranian territory in response to an attack on an American drone. Thus, a genuine peace agreement and negotiations remain as distant for Iran and the United States as the Moon is from Earth. In addition, the market has focused its attention on the US congressional elections, the results of which may become known as early as tomorrow night. A Democratic victory could support the US dollar, as traders may interpret it as an improvement in the outlook for the US economy.

On the 4-hour chart, the GBP/USD pair rebounded from the 76.4% retracement level at 1.3277, reversed in favor of the British pound, and rose toward the 50.0% retracement level at 1.3409. A rebound from this level would favor the US dollar and a potential decline toward the 61.8% Fibonacci level at 1.3348. Consolidation above 1.3409 would increase the likelihood of further growth toward the next Fibonacci level at 1.3467 (38.2%). No emerging divergences are currently visible on any of the indicators.

Commitments of Traders (COT) Report:

The sentiment of the "Non-commercial" trader category became slightly less bearish over the latest reporting week. The number of Long positions held by speculators increased by 2,417, while the number of Short positions rose by 1,411. The gap between Long and Short positions currently stands at approximately 57,000 versus 136,000. The bears maintain a substantial advantage, which continues to widen over time. Previously, bearish dominance was unquestionable, but it is now being called into question because the news background has changed in recent months.

The bearish trend in the British pound remains unconvincing, but developments in the near future will depend on Trump's trade policy, the monetary policies of the Federal Reserve and the Bank of England, as well as the duration, scale, and consequences of the war in the Middle East. In recent months, the market has shifted its expectations toward peace, but negotiations between Iran and the United States failed before they had properly begun. As early as November, the war between the two countries could resume on a full scale.

Economic Calendar for the United States and the United Kingdom:

• US – JOLTS Job Openings (15:00 UTC).
• US – Congressional Elections.

On November 3, the economic calendar contains two noteworthy events. The impact of economic news on market sentiment on Tuesday may be relatively weak, as the US elections are scheduled for today, but the results will not become available until tomorrow.

GBP/USD Forecast and Trading Tips:

Short positions in the pair may be considered today if the price consolidates below 1.3404 on the hourly chart, with targets at 1.3342 and 1.3263. Long positions were possible following an hourly close above 1.3342, with a target of 1.3404. This target has been reached. New long positions may be considered following an hourly close above 1.3404, with a target range of 1.3454–1.3469.

The Fibonacci retracement levels are drawn from 1.3674 to 1.3136 on the hourly chart and from 1.3158 to 1.3655 on the 4-hour chart.