25.06.202611:01 Forex Analysis & Reviews: GBP/USD – June 25th: The Pound Struggles to Maintain Its Position

On the hourly chart, the GBP/USD pair declined once again into the 1.3158–1.3177 support level, but the bulls managed to keep the pound above this area. Therefore, a rebound from the zone would favor the pound and support a moderate rise toward the 1.3268–1.3277 resistance level. If the bulls fail to defend the 1.3158–1.3177 level, the decline is likely to continue toward the 127.2% Fibonacci level at 1.3025.

The wave picture turned bearish again following the FOMC meeting. The latest completed downward wave broke below the previous low, while the latest upward wave failed to exceed the previous peak. It is difficult to say how long the bears will maintain control this time, as the dollar's fundamental support does not appear particularly convincing. Nevertheless, if we set aside the wave structure, the bears continue to dominate the market. However, with the conflict in the Middle East coming to an end, it is difficult to expect sustained long-term gains for the U.S. dollar.

Wednesday's news background did not suggest additional pressure on the pound, yet bears continued opening positions throughout the day. Only by a narrow margin did the pair remain above the 1.3158–1.3177 support level. Today, support for bullish traders may come from U.S. economic data, particularly the first-quarter GDP report. In recent quarters, the U.S. economy has not demonstrated especially strong growth rates, so the actual figure will most likely come in below the forecast of 1.6% year-on-year. Therefore, after a week-long pause, the bulls may receive grounds for a counterattack.

In my view, since the Federal Reserve meeting, the dollar has lacked meaningful fundamental support on most trading days. Nevertheless, the Bank of England's less hawkish stance and the Federal Reserve's more hawkish tone have influenced market sentiment. At the same time, traders should now take into account the end of the military conflict in the Middle East, which should increase demand for risk-sensitive assets, including the British pound. In my opinion, the pound's decline is approaching its conclusion.

On the 4-hour chart, the GBP/USD pair has returned to the 100.0% Fibonacci retracement level at 1.3159. A rebound from this level would favor the pound and support a renewed advance toward the 76.4% Fibonacci level at 1.3277. Consolidation below 1.3159 would signal a continuation of the decline toward the 1.3025–1.3044 support level. A bullish divergence is forming on the CCI indicator, increasing the probability of a rebound from 1.3159.

Commitments of Traders (COT) Report:

Sentiment among the Non-commercial category became more bearish during the latest reporting week. The number of Long positions held by speculators decreased by 3,700, while the number of Short positions increased by 3,672. The gap between Long and Short positions now stands at approximately 42,000 versus 114,000. Bears have dominated the market in recent months. However, while this dominance previously appeared justified, the information backdrop has changed considerably. The bears' advantage is now nearly threefold.

I still do not believe in a long-term bearish trend for the pound. However, in the near term, market direction will depend not on economic indicators, Trump's trade policy, or central bank monetary policy, but on the duration, scale, and consequences of the conflict in the Middle East. In recent weeks, market sentiment has shifted toward expectations of peace, but negotiations between Iran and the United States may prove lengthy and complicated.

News Calendar for the United States and the United Kingdom:

• U.S. – Core PCE Price Index (12:30 UTC).
• U.S. – Durable Goods Orders (12:30 UTC).
• U.S. – First-Quarter GDP (12:30 UTC).
• U.S. – Initial Jobless Claims (12:30 UTC).

The economic calendar for June 25 contains four notable releases, with the GDP report attracting the most attention. Economic data may influence market sentiment during the second half of the day. However, the market's current sharp decline is clearly not being driven solely by economic indicators.

GBP/USD Forecast and Trading Tips:

Short positions were possible after a rebound from the 1.3268–1.3277 resistance level on the hourly chart, targeting the 1.3158–1.3177 support level. The target has been reached. New short positions may be considered after a close below the 1.3158–1.3177 level, with a target at 1.3025. Long positions may be considered after a rebound from the 1.3158–1.3177 support level, targeting 1.3268–1.3277.

Fibonacci grids are drawn from 1.3158 to 1.3655 on both the hourly and 4-hour charts.