The wave structure turned bearish again following the FOMC meeting. The last completed upward wave broke above the previous peak, while the new downward wave broke below the previous low. It remains unclear how much momentum the bears will have this time, but support for the U.S. dollar may prove temporary. If we set aside the wave analysis, bears continue to maintain full control of the market. However, if the conflict in the Middle East comes to an end, the dollar is unlikely to have strong prospects for long-term appreciation.

There was no significant news background on Friday, apart from the UK retail sales report, which had little importance for traders. Over the weekend, reports emerged that UK Prime Minister Keir Starmer could resign as early as this week. Donald Trump stated that Starmer may step down due to failures in migration policy and the energy sector. It should be recalled that rumors about Starmer's possible resignation first appeared about a month ago after the Labor Party suffered defeat in local elections. It later became clear that support for Starmer's party had declined significantly over the past two years, which remains the main source of pressure on the prime minister, including from within his own party. Several ministers have already left their posts. For the British pound, a change in political leadership is a potentially negative factor. Since the market does not yet know who may become the next prime minister, uncertainty remains elevated, providing little confidence for bulls. Combined with ongoing uncertainty in the Middle East, bears once again have a strong opportunity to continue their pressure on the market.

On the 4-hour chart, GBP/USD declined to the 100.0% Fibonacci retracement level at 1.3159. A rebound from this level would favor the pound and allow for some recovery toward the 1.3277 level. Consolidation below 1.3159 would increase the likelihood of a continued decline toward the next Fibonacci retracement level of 127.2% at 1.3025. No developing divergences are currently observed on any indicator.

Commitments of Traders (COT) Report:

The sentiment of the Non-commercial category became more bearish during the latest reporting week. The number of Long positions held by speculators decreased by 7,944, while the number of Short positions increased by 4,051. The gap between Long and Short positions now stands at approximately 46,000 versus 109,000. Bears have dominated the market in recent months, which is hardly surprising given the geopolitical situation in the Middle East and the political crisis in the United Kingdom. The bears' advantage is currently more than twofold.

I still do not believe in a long-term bearish trend for the pound, but in the near term everything will depend 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. In recent weeks, the market has adjusted to the expectation of a prolonged conflict, but the latest developments suggest that a ceasefire may still be achieved, although it is unlikely to be quick or easy.

News Calendar for the United States and the United Kingdom:

June 22 contains no notable economic events. Therefore, the economic backdrop is unlikely to influence market sentiment on Monday.

GBP/USD Forecast and Trading Tips:

Short positions were possible following a rebound from the 1.3454–1.3466 level and after a close below the 1.3277 level on the hourly chart, with targets at 1.3408, 1.3349–1.3355, 1.3277, and 1.3158–1.3177. All targets have been reached. New short positions may be considered after consolidation below 1.3158, with a target at 1.3025. Long positions may be considered following a rebound from the 1.3158–1.3177 level, with a target at 1.3277.

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