On the hourly chart, GBP/USD continued to trade near the 1.3633–1.3641 level on Tuesday. After the past four days, it is difficult to say what traders are planning to do next. There has been no clear consolidation either above or below this zone. Thus, the market has reached a state of complete equilibrium, and for now, neither bulls nor bears are ready to disrupt it.

The market situation remains bullish. The latest completed downward wave did not break the previous low, while the latest upward wave (which is not yet complete) broke the previous peak. Thus, bulls currently have the initiative in the market, and their advantage is strengthening with each passing day. The bullish trend can only be considered broken after the low of the latest completed wave is breached, i.e., below 1.3414. Alternatively, it could be considered broken after two downward waves have formed.

The fundamental backdrop was extremely weak on Tuesday and failed to attract traders' attention, which is clearly visible in the pair's intraday movements. Therefore, I suggest forgetting about yesterday and focusing on today. Several reports due in the United States today deserve attention. First and foremost, this concerns second-quarter GDP, but the report on durable goods orders will also be important. The PCE index is one of the inflation indicators, but I would not pay too much attention to it. The United States recently released the usual inflation reports, which provided a complete picture of what is happening with prices. Prices are gradually slowing, but it is still unclear how long this process will continue. Energy prices rose again in August, so it would be logical if inflation also accelerates at the end of the current month. However, inflation is no longer the key indicator for the Fed. It should now be considered only together with the labor market and economic growth.

On the 4-hour chart, GBP/USD rose to the 0.0% retracement level at 1.3657. A rejection from this level would favor the US dollar and some decline toward the 23.6% Fibonacci level at 1.3538. Consolidation above 1.3657 would increase the chances of further gains for the pound. No new emerging divergences are observed on any indicator today.

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 12,075, while the number of Short positions increased by 10,427. The current gap between the numbers of Long and Short positions is essentially 77,000 versus 132,000. The gap and the bears' advantage are gradually narrowing; however, the bears' advantage remains enormous. Previously, the bears' dominance raised no questions, but it does now because the fundamental backdrop has changed.

I still do not believe in a bearish trend for the pound, but in the near term, everything will depend on Trump's trade policy, the monetary policy of the Fed 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 adjusted its expectations toward peace, but negotiations between Iran and the United States failed without really getting started. And there is no guarantee that they will resume in the near future. Meanwhile, FOMC monetary policy is shifting toward a refusal to tighten further, which does not add optimism for dollar bulls.

News Calendar for the United States and the United Kingdom:

• United States – Core Personal Consumption Expenditures Price Index (12:30 UTC).
• United States – Change in durable goods orders (12:30 UTC).
• United States – Change in second-quarter GDP (12:30 UTC).
• United States – Change in personal income and spending (12:30 UTC).

On August 26, the economic calendar contains four entries. The economic backdrop may influence market sentiment during the second half of the day on Wednesday.

GBP/USD Forecast and Trading Tips:

Selling the pair is possible today if it consolidates below the 1.3633–1.3641 level on the hourly chart, with a target of 1.3556. Buying is possible if it consolidates above the 1.3633–1.3641 level, with a target of 1.3731. However, the last several days should be taken into account, as they have not produced any signals.

The Fibonacci level grids are drawn from 1.3557–1.3272 on the hourly chart and from 1.3158–1.3655 on the 4-hour chart.