The wave situation remains bullish. The last completed downward wave did not break the previous low, while the new upward wave broke the previous peak. The news background for the pound has been weak in recent months, but the news background in America is even worse. Donald Trump regularly provides support to the bulls, which ensures growth of the British currency.

The news background on Monday was not entirely bad for the dollar. Donald Trump threatened to impose 100% tariffs on Canada if it signs a free trade agreement with China. However, nothing has been heard about such an agreement in Canada itself. Canadian officials said that Ottawa fully adheres to the trilateral agreement with the U.S. and Mexico, according to which deals with non-market economies must be approved by the partners. In the U.S., it was also stated that any trade agreement between Canada and China does not automatically mean higher tariffs for Canada. Washington would take such a step only if all barriers in Canada–China trade relations were removed, since in that case most goods from China would be redirected to America. Therefore, there is no need to worry about new tariffs yet. Or is there? Given how events are unfolding in 2026, I fully admit that today or tomorrow we may hear new threats from Trump. In my opinion, traders are no longer waiting for news from the White House that would signal selling the dollar. They are simply selling, confident that a new batch of bad news from America is coming.

On the 4-hour chart, the pair failed to consolidate below the support level of 1.3369–1.3435. The growth process resumed toward the next Fibonacci level of 127.2% at 1.3795, which the bulls do not have very far left to reach. A rebound from the 1.3795 level would allow traders to expect a small decline. No emerging divergences are observed today.

Commitments of Traders (COT) Report:

The sentiment of the "Non-commercial" trader category became more bullish over the last reporting week. The number of long positions held by speculators increased by 2,329, while the number of short positions decreased by 961. The gap between long and short positions is now effectively as follows: 81,000 versus 103,000, and it is narrowing rapidly. Bears have dominated in recent months, but it seems they have exhausted their potential. At the same time, the situation with euro currency contracts is exactly the opposite. I still do not believe in a bearish trend for the pound.

In my view, the pound still looks less "dangerous" than the dollar. In the short term, the U.S. currency may enjoy demand in the market from time to time. But not in the long term. Donald Trump's policies have led to a sharp deterioration in the labor market, and the Federal Reserve is forced to pursue monetary easing to stop the rise in unemployment and stimulate the creation of new jobs. U.S. military aggression also does not add optimism for dollar bulls.

News Calendar for the U.S. and the United Kingdom:

• U.S. – ADP employment change for the week (13:15 UTC).

The economic calendar for January 27 contains only one entry, which is not particularly interesting for traders. The impact of the news background on market sentiment on Tuesday may be absent.

GBP/USD Forecast and Trader Advice:

Selling the pair is possible today if it consolidates below the 1.3595–1.3620 level on the hourly chart, with a target of 1.3526–1.3539. Buying positions could be opened after a close above the 1.3437–1.3470 level with targets at 1.3526–1.3539 and 1.3595. Today, buy positions can be kept open with a target of 1.3755.

Fibonacci grids are drawn from 1.3470–1.3010 on the hourly chart and from 1.3431–1.2104 on the 4-hour chart.