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The wave structure remains bearish, as bulls lack positive geopolitical developments to support a full-scale advance. The latest completed upward wave failed to break above the previous peak, while the latest downward wave broke below the previous low. Geopolitical conditions remain highly uncertain at present, leaving neither bulls nor bears with a clear advantage. The bearish trend can be considered complete only after the June 5 high is surpassed.
There was no significant news background on Monday, which explains the low level of trading activity. However, interesting developments began to emerge on Tuesday morning. It is difficult to describe Trump's latest promise to sign a deal with Iran within two weeks as "important information," given that the U.S. president has made numerous similar statements over recent months. In fact, nearly every week Trump repeats the same message — that a resolution to the conflict with Iran will be achieved within days, weeks, or some unspecified period. As a result, the rhetoric of the U.S. leader remains unchanged, while the market continues to be fed expectations of an imminent end to the conflict and lower oil prices. Following Trump's comments, the U.S. dollar weakened slightly, but only marginally, as confidence in the president's promises is currently very low. According to Trump, Iran is already prepared to abandon its nuclear weapons ambitions, but similar statements were made several weeks ago. At that time, they were completely rejected by Tehran. Most likely, the same will happen again. Today or tomorrow, Iranian officials may once again state that no progress has been made in negotiations with the United States and that the issue of removing Iran's stockpile of enriched uranium is not even under discussion. Therefore, this week bulls should place their hopes on a weak inflation report and a tightening of ECB monetary policy.
On the 4-hour chart, GBP/USD rebounded from the 1.3482–1.3514 resistance level and declined toward the 23.6% Fibonacci retracement level at 1.3327. A consolidation below this level would allow bears to continue the downward move toward the next Fibonacci level of 0.0% at 1.3159. A rebound from 1.3327 would favor the pound and support a moderate recovery toward 1.3429. No emerging divergences are currently observed on any indicator.
Sentiment among the Non-commercial category became less bearish during the latest reporting week. The number of long positions held by speculators decreased by 4,291, while short positions declined by 13,471. The gap between long and short positions now stands at approximately 53,000 versus 110,000. Bears have dominated in recent months, which comes as no surprise given the geopolitical situation in the Middle East and the political crisis in the United Kingdom. The bearish advantage currently exceeds two-to-one.
I still do not believe in a sustained bearish trend for the pound. However, in the near term, developments will depend less on economic indicators, Trump's trade policy, or central bank monetary policy, and more on the duration, scale, and consequences of the conflict in the Middle East. In recent weeks, the market has adjusted to the expectation of a prolonged conflict, but recent developments suggest that a ceasefire may still be achievable, although neither quickly nor easily.
United States
The economic calendar for June 9 contains only one event, which is unlikely to attract significant market attention. Therefore, the influence of the economic backdrop on market sentiment on Tuesday is expected to be extremely limited.
Short positions were possible after a rebound from the 1.3454–1.3466 resistance level on the hourly chart, targeting 1.3408 and 1.3349–1.3355. Both targets have been reached. New short positions may be considered following a close below the 1.3349–1.3355 level, with a target at 1.3277. Long positions were possible after a consolidation above the 1.3349–1.3355 level, targeting 1.3408. These positions may still be held today.
Fibonacci grids are drawn from 1.3158 to 1.3655 on the hourly chart and from 1.3866 to 1.3158 on the 4-hour chart.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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