On the hourly chart, the GBP/USD pair on Thursday rebounded from the resistance level of 1.3596–1.3620 and declined toward the support level of 1.3513–1.3539. However, price action over the past few days has remained largely sideways. Today, a rebound from the support zone could allow traders to expect a resumption of growth and renewed attempts by the pound to close above the 1.3596–1.3620 level. However, much will depend today on the news background.

The wave structure remains bullish. The latest completed upward wave broke above the previous peak, while the latest downward wave failed to break below the previous low. Geopolitical factors gave bears almost complete control of the market for two months, but the geopolitical backdrop has since shifted and now largely supports the bulls. At present, the ceasefire between Iran and the U.S. remains in place, although the situation is moving toward further escalation and prolonged confrontation. It will be difficult for bulls to launch strong attacks in the coming weeks, but there are currently no clear reasons for a retreat either.

On Thursday, the news background once again intensified pressure on the dollar. Donald Trump again threatened Iran with renewed missile strikes and attacks if an agreement is not signed in the near future. In addition, important U.S. reports on Nonfarm Payrolls and the unemployment rate will be released today, and over the past year these reports have more often disappointed than encouraged investors. In March, nearly 180,000 jobs were created, but it should be noted that this was almost an isolated case of such a strong reading. One month earlier, the figure stood at -133,000. The unemployment rate has declined in recent months from 4.5% to 4.3%, but over the past three years it has risen from 3.4% to 4.3%. The increase is not dramatic, but unemployment is still rising, while far fewer jobs are being created compared to several years ago. Thus, every labor market report represents a potential risk for the dollar. The market is no longer rushing blindly into the U.S. dollar because of the conflict in the Middle East. In my view, bullish traders remain in a much more confident position than the bears.

On the 4-hour chart, the pair has consolidated above the descending trend channel, which allows expectations for the formation of a full-fledged bullish trend. Consolidation above the Fibonacci level of 38.2% at 1.3540 supports the possibility of continued growth toward the corrective level of 23.6% at 1.3664. The technical picture on the hourly chart is currently more informative, and I recommend focusing more closely on it. No emerging divergences are currently observed.

Commitments of Traders (COT) Report:

Sentiment among the "Non-commercial" category of traders became more bearish during the latest reporting week. The number of long positions held by speculators decreased by 3,509, while the number of short positions increased by 5,091. The gap between long and short positions now effectively stands at 59,000 versus 120,000. For six consecutive weeks, non-commercial traders have actively increased selling positions and reduced buying positions, resulting in a strong imbalance between longs and shorts. Bears have dominated in recent months, which comes as no surprise given the geopolitical situation.

I still do not believe in a long-term bearish trend for the pound, but everything now depends not on economic indicators, Trump's trade policy, or central bank monetary policy, but rather on the duration, scale, and consequences of the war in the Middle East. In recent weeks, the market had shifted toward expectations of de-escalation, but recent news suggests that a full ceasefire remains far away, and the conflict could resume at any moment. In that case, the bears' advantage could become even stronger.

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

• U.S. – Nonfarm Payrolls Change (12:30 UTC)
• U.S. – Unemployment Rate (12:30 UTC)
• U.S. – Average Hourly Earnings Change (12:30 UTC)
• U.S. – University of Michigan Consumer Sentiment Index (14:00 UTC)

On May 8, the economic calendar contains four entries, at least two of which are highly important. The impact of the economic background on market sentiment on Friday could be significant during the second half of the day.

GBP/USD Forecast and Trading Tips:

Selling opportunities may arise today if the pair rebounds again from the 1.3596–1.3620 level on the hourly chart, with targets at 1.3526–1.3539. Buying opportunities may emerge if the pair rebounds from the 1.3513–1.3539 level, targeting 1.3596–1.3620. Long positions may also be considered if the pair closes above the 1.3611–1.3620 level, with a target at 1.3700.

Fibonacci levels are drawn from 1.3866–1.3158 on the hourly chart and from 1.3012–1.3868 on the 4-hour chart.