On the hourly chart, the GBP/USD pair reversed in favor of the British currency on Monday and rose toward the resistance level of 1.3341–1.3352. A rebound from this zone will favor the US dollar and a resumption of the decline toward the support level of 1.3199–1.3214. A consolidation above the 1.3341–1.3352 level will increase the likelihood of continued growth toward the next resistance level of 1.3437–1.3465.

The wave situation has once again shifted to "bearish." The last completed upward wave broke the previous peak, but the latest downward wave broke the two previous lows. The news background for the British currency has been weak in recent months, while geopolitics has given bears a clear advantage in the market. The war in Iran remains the main reason for the strengthening of the US dollar, and bullish traders do not see clear timeframes for the end of the conflict.

On Monday, the news did not attract much interest from traders, but sluggish reports about a possible unblocking of the Strait of Hormuz and a temporary pause in bearish pressure allowed the pound to recover slightly. Now traders face the resistance level of 1.3341–1.3352, which will show whether bulls have the strength and willingness to act. A minor correction may be random, but strong movements are almost never accidental. Tomorrow evening, the Fed will hold its second meeting of 2026. The market does not expect changes in monetary policy parameters; Donald Trump still calls for easing, US GDP slowed to 0.7% in the fourth quarter, the labor market remains weak, and inflation may accelerate significantly in the near future. Thus, this week's FOMC meeting could be very interesting. In particular, traders will learn which issue concerns the committee more: potential inflation growth or the weakness of the US labor market and economy. In my view, until inflation begins to rise, the Fed will not take any action. If the consumer price index starts accelerating, then the next interest rate cut will not happen anytime soon. Therefore, it is first necessary to understand how inflation will respond to rising oil prices and the war in Iran. However, Jerome Powell and his colleagues cannot simply ignore the weakening economy and rising unemployment. Therefore, surprises tomorrow evening are possible.

On the 4-hour chart, the pair rebounded from the upper boundary of the downward trend channel, reversed in favor of the US currency, and resumed its decline toward the corrective level of 1.3145. Only a close above the downward channel will allow traders to expect the end of the bearish trend and growth toward the Fibonacci level of 0.0% at 1.3786. No emerging divergences are observed on any indicators today.

Commitments of Traders (COT) report:

The sentiment of the "Non-commercial" trader category became more bearish over the last reporting week, which no longer looks accidental under current conditions. The number of long positions held by speculators decreased by 10,229, while short positions increased by 1,282. The gap between long and short positions is now effectively 49,000 versus 133,000. In recent months, bears have more often dominated, although the situation with euro contracts is the opposite. I still do not believe in a sustained bearish trend for the pound, but now everything will depend not on economic indicators or Trump's trade policy, but on the duration and scale of the war in the Middle East.

Over the past year, the pound looked like a safer currency compared to the dollar—more stable and with a clearer economic outlook. However, in recent months, first a correction began while maintaining a bullish trend, and then the conflict in the Middle East started intensifying almost daily. Geopolitics remains the only reason for the strengthening of the US currency.

Economic calendar for the US and the UK:

• US – ADP Employment Report (weekly) (12:15 UTC)
• US – Existing Home Sales (14:00 UTC)

On March 17, the economic calendar contains only two entries, and there is little hope that the market will pay attention to them. The influence of the news background on market sentiment on Tuesday may again be extremely weak or absent.

GBP/USD forecast and trading tips:

Selling the pair is possible today if there is a rebound on the hourly chart from the 1.3341–1.3352 level, targeting 1.3199–1.3214. Buying is possible today if there is a close above the 1.3341–1.3352 level, targeting 1.3437–1.3465.

Fibonacci levels are constructed from 1.3341–1.3866 on the hourly chart and from 1.2104–1.3786 on the 4-hour chart.