On the hourly chart, the GBP/USD pair continued its downward movement on Monday and consolidated below the support level of 1.3199–1.3214. Thus, the decline may continue today toward the 1.3139 level and even lower. At the moment, there are no limits to the growth of the US currency. A consolidation of the pair above the 1.3199–1.3214 level would favor the pound and some growth toward the resistance level of 1.3341–1.3352.

The wave structure has once again turned "bearish." The last completed upward wave exceeded the previous peak by only a few points, while the new downward wave confidently broke the previous low. The news background remains weak for the pound, and geopolitics gives bears an almost complete advantage in the market. The war in Iran remains the main reason for the strengthening of the US currency in recent months.

There was no significant news background for either the pound or the dollar on Monday. However, in the evening, a speech was delivered by FOMC Chairman Jerome Powell, which slightly disappointed bearish traders. Recently, expectations of rising inflation have reached unprecedented levels, prompting many traders to anticipate tighter monetary policy from the FOMC in 2026. However, even if tightening occurs, it will not happen in the near future, as Powell clearly stated. "Despite inflationary pressure due to rising oil prices, the Fed is in a good position to wait and see," the FOMC head said. This statement caused a short-term retreat of the bears last evening, but at present, it is not Powell who is "driving" the dollar's exchange rate or market sentiment. The situation in the Middle East continues to escalate, so traders increasingly prefer to shift their assets into the dollar, which many consider the best "safe haven." Therefore, I believe that even if the Fed softens its policy, demand for the dollar will not decrease until the situation with oil and the war in Iran begins to improve.

On the 4-hour chart, the pair consolidated above a descending trend channel, which gave the bulls absolutely nothing. A rebound from the Fibonacci level of 50.0% – 1.3439 once again favored the US dollar, while consolidation below the 1.3340–1.3369 level and the 1.3215 level suggests a continuation of the decline toward 1.3140 and 1.3044. No emerging divergences are observed today on any indicators.

Commitments of Traders (COT) Report:

The sentiment of the "Non-commercial" trader category became even more bearish over the past reporting week. For seven consecutive weeks, non-commercial traders have been actively increasing short positions and reducing long positions. The number of long positions held by speculators increased by 2,166, while short positions decreased by 4,927. The gap between long and short positions is now effectively: 46 thousand versus 105 thousand. Bears have dominated in recent weeks, which raises no questions given the geopolitical situation. I still do not believe in a long-term bearish trend for the pound, but now everything depends not on economic indicators, Trump's trade policy, or central bank monetary policy, but on the duration, scale, and consequences of the war in the Middle East.

Over the past year, the pound looked like a safer currency compared to the dollar—more stable and with a clearer economic outlook. However, in recent months, first a correction began while maintaining a bullish trend, and then the conflict in the Middle East started escalating almost daily. Geopolitics remains the only reason for the strengthening of the US currency.

News calendar for the US and the UK:

• United Kingdom – GDP change for the fourth quarter (06:00 UTC).
• United States – JOLTS job openings change (14:00 UTC).

On March 31, the economic calendar contains two entries, which may again remain in the shadow of geopolitical events. The impact of the news background on market sentiment on Tuesday may be weak.

GBP/USD Forecast and Trading Tips:

Selling the pair was possible after consolidation below the 1.3341–1.3352 level on the hourly chart, targeting 1.3199–1.3214. The target has been reached. A rebound from this zone from below would allow opening new short positions with targets at 1.3139 and 1.3016. Buying will become possible after consolidation above the 1.3199–1.3214 level with a target of 1.3341–1.3352.

Fibonacci levels are plotted from 1.3341–1.3866 on the hourly chart and from 1.3012–1.3868 on the 4-hour chart.