The wave situation remains "bearish." The last completed downward wave broke the previous low, while the new upward wave has not yet broken the last peak. The news background for the pound has been negative over the past two weeks, but I believe traders have already fully priced this in. This week, however, the negative news background may shift to the dollar. To cancel the "bearish" trend, the pair would need to rise another 300 points, but I think we will see signs of a shift to a "bullish" trend much earlier.

On Friday, the pound was supported by the U.S. consumer sentiment report, as well as news of a potential government "shutdown" and new tariffs announced by Donald Trump. The White House decided to impose import duties on all foreign trucks, furniture, and medicines. Of course, if foreign companies build factories in the U.S., they will be exempt from tariffs. The threat of a shutdown arose for the same reasons as almost every year: Democrats and Republicans cannot reach agreement on funding for government agencies due to certain "sticking points." The Democratic Party insists on preserving tax benefits and insurance subsidies for Americans, while Donald Trump's administration demands cutting subsidies and only discussing the matter after government funding is resolved. Clearly, once the threat of a shutdown passes, Republicans will no longer need to make concessions to Democrats, since they control both chambers. The shutdown could be prolonged.

On the 4-hour chart, the pair rebounded from the 1.3339 level and turned in favor of the British pound. Consolidation above the 100.0% Fibonacci level – 1.3435 – increases the probability of a new rise toward the 127.2% corrective level – 1.3795. No emerging divergences are seen in any indicator today. A new decline in the pound can be expected only after a close below 1.3339.

Commitments of Traders (COT) Report:

The sentiment of the "Non-commercial" trader category turned more "bullish" last reporting week. The number of long positions held by speculators increased by 3,704, while the number of short positions decreased by 912. The gap between long and short positions now stands at approximately 85,000 versus 86,000. Bullish traders are once again tipping the balance in their favor.

In my view, the pound still has prospects for decline, but with each passing month the U.S. dollar looks weaker and weaker. Previously, traders worried about Donald Trump's protectionist policies without knowing what results they might bring; now they may worry about the consequences of those policies: a potential recession, the constant imposition of new tariffs, and Trump's fight with the Fed, as a result of which the regulator could become "politically controlled" by the White House. Thus, the pound already looks far less risky than the U.S. currency.

News calendar for the U.S. and the UK:

September 29 – the economic events calendar contains no noteworthy entries. The news background will not affect market sentiment on Monday.

Forecast for GBP/USD and trader advice:

Selling the pair is possible today if it closes below 1.3425 on the hourly chart, with targets at 1.3332–1.3357. Buying could have been considered on a rebound from the 1.3332–1.3357 zone, with targets at 1.3425, 1.3482, and 1.3528. These trades can be kept open today with a stop-loss moved to breakeven.