On the hourly chart, the GBP/USD pair traded between the levels of 1.3425 and 1.3520 in a horizontal channel on Friday. Thus, there were no trading or reversal signals on Friday. After rebounding from the 1.3425 level, the pound may continue its upward movement. The new week has started with new bullish attacks as Trump announced over the weekend his readiness to raise tariffs on steel and aluminum. A close above 1.3520 would signal a move toward the next level at 1.3620.

The wave pattern clearly indicates the continuation of the "bullish" trend. The last upward wave has broken the previous peak, while the current downward wave has yet to break the previous low and remains incomplete. Bulls may find it difficult to count on further growth without new announcements from Donald Trump about increasing or imposing new tariffs. However, the U.S. president appears ready to continue "adding fuel to the fire" by raising tariffs and escalating the trade war with China. Thus, bulls have a basis for new attacks this week.

On Friday, both the UK and U.S. had a lack of important news, leading to horizontal movement with low trader activity. However, this week is expected to be much more active. The news background will be strong, with many important reports coming from the U.S., and Donald Trump already gave traders a reason over the weekend to resume selling the dollar. The U.S. president stated that the current 25% tariffs on steel and aluminum imports are not fully protecting American producers. He claims some countries are successfully bypassing these tariffs, suggesting they need to be raised. Starting June 4, Trump plans to increase the import tariffs on steel and aluminum to 50%. According to him, this level will be much harder to circumvent, and domestic producers are already "reviving." Traders, however, are not sharing Trump's optimism, and the dollar may resume its decline this week.

On the 4-hour chart, the pair has consolidated above the 100.0% Fibonacci level at 1.3435. Thus, the upward movement may resume toward the next Fibonacci corrective level at 127.2% — 1.3795. No emerging divergences are currently seen on any indicator. The bullish trend remains intact, but a close below 1.3435 could signal a fall toward the 76.4% Fibonacci level at 1.3118.

Commitments of Traders (COT) Report:

Trader sentiment in the "Non-commercial" category became much more "bullish" over the last reporting week. The number of long positions held by speculators increased by 14,247, while the number of short positions rose by 2,861. Bears have long lost their advantage in the market. The gap between long and short positions now stands at 35,000 in favor of the bulls: 102,000 against 67,000.

In my view, the pound still faces prospects for decline, but recent developments are turning the market in the long term. Over the past three months, the number of long positions has grown from 65,000 to 102,000, while short positions have fallen from 76,000 to 67,000. Under Donald Trump, confidence in the dollar has shaken, and COT reports show that traders are not eager to buy dollars. Thus, regardless of the overall news background, the dollar continues to decline amid events surrounding Donald Trump.

Economic Calendar for the U.S. and UK:

• UK — Manufacturing PMI (08:30 UTC)
• U.S. — S&P Manufacturing PMI (13:45 UTC)
• U.S. — ISM Manufacturing PMI (14:00 UTC)

On Monday, the economic calendar includes three releases, but traders are likely to continue focusing on the story of new tariff hikes. The news background's influence on trader sentiment is expected to be moderate and not in favor of the bears.

GBP/USD Forecast and Trading Tips:

Sales of the pair were possible upon a close below 1.3520 on the hourly chart, targeting 1.3425 — target achieved. Today, a rebound from 1.3520 would allow for new selling with a target of 1.3425. Buying was possible from the 1.3425 level; these trades can remain open. New purchases will be possible today if the pair closes above 1.3520 with a target at 1.3620.

Fibonacci levels are constructed between 1.3205–1.2695 on the hourly chart and 1.3431–1.2104 on the 4-hour chart.