The wave structure remains bearish, as bulls still lack sufficient positive geopolitical developments to launch a sustained advance. The most recent completed upward wave failed to break above the previous peak, while the latest downward wave failed to break below the previous low. Geopolitical developments have recently provided support to bulls; however, the prospects for reaching an agreement between Iran and the United States are once again fading rapidly. The bearish trend can be considered complete only after a breakout above the May 25 high.

The news backdrop shifted every few hours on Tuesday. Economic releases favored the bears, as the U.S. JOLTS job openings figure for April came in above market expectations. However, this report was released relatively late in the day, and traders showed little activity beforehand. Meanwhile, Donald Trump managed to prevent a renewed escalation of the conflict in the Middle East. Following talks with Israel, he reportedly persuaded the country not to carry out strikes against Lebanon or deploy troops there, actions that would have prompted Iran to suspend negotiations with the United States. This morning, the U.S. President stated that negotiations are continuing and that an agreement could be reached in the near future, though he could provide no guarantees. According to Trump, Iran is a large country, and negotiations with it remain extremely difficult. I do not attribute the morning strengthening of the U.S. dollar to geopolitical developments, as market sentiment has been changing as frequently as geopolitical headlines in recent days. The current decline may end just as quickly as it began.

On the 4-hour chart, GBP/USD has returned to the 1.3482–1.3514 resistance level. Another rebound from this zone would once again favor the U.S. dollar and support a moderate decline toward the 23.6% Fibonacci retracement level at 1.3327. However, price movements are likely to remain driven primarily by geopolitical developments rather than technical analysis in the near term. Technical analysis should be viewed only as a supplementary tool. No emerging divergences are currently observed on any indicator.

Commitments of Traders (COT) Report:

Sentiment among the Non-commercial category of traders became slightly less bearish during the latest reporting week. The number of Long positions held by speculators decreased by 10,097, while the number of Short positions declined by 13,006. The gap between Long and Short positions currently stands at approximately 58,000 versus 119,000 contracts. Bears have dominated the market 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 bears' advantage currently exceeds a two-to-one ratio.

I still do not believe in a sustained 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 expectations of a prolonged conflict. However, recent developments suggest that a ceasefire may still be achieved, although the process is unlikely to be easy or quick.

Economic Calendar for the United Kingdom and the United States:

• United Kingdom – Services PMI (08:30 UTC).
• United States – ADP Employment Change (12:15 UTC).
• United States – ISM Services PMI (14:00 UTC).

The economic calendar for June 3 contains three events, two of which can be considered significant. Economic data may influence market sentiment during the second half of Wednesday's trading session.

GBP/USD Forecast and Trading Recommendations:

Short positions may be considered today following a rebound from the 1.3454–1.3466 level on the hourly chart, with targets at 1.3408 and 1.3349–1.3355. Long positions may be considered following a rebound from the 1.3408 level, targeting the 1.3454–1.3466 level. Traders may also consider buying the pair if it closes above the 1.3454–1.3466 level, with a target of 1.3526–1.3539.

Fibonacci retracement levels are plotted from 1.3158 to 1.3655 on the hourly chart and from 1.3866 to 1.3158 on the 4-hour chart.