On the hourly chart, the GBP/USD pair continued its decline on Friday after consolidating below the 1.3587–1.3620 zone and ended the day with a close below the 76.4% Fibonacci level at 1.3482. This suggests that the pound's decline may continue toward the next support zone of 1.3416–1.3425. A consolidation above the 1.3482 level would work in favor of the British pound and could lead to some growth toward the 100.0% corrective level at 1.3587.

The wave pattern has shifted to a "bearish" one. This happened suddenly and unexpectedly. The last upward wave broke the previous high, but the following downward wave easily broke the last low. The information backdrop was mostly neutral for the pound last week, but Thursday and Friday ruined everything. However, that news has already been priced in — so what will allow the bears to continue their pressure?

The Bank of England hinted last week at another possible monetary policy easing before the end of the year, which was the trigger for the pound's decline. This was followed by news of discrepancies in income and spending in the UK's next fiscal year budget, as well as a significant rise in national debt. Earlier, there had already been news of a sharp jump in government bond yields. These are indeed serious reasons to sell the pound, but they can hardly compete with the level of negativity coming from the U.S.

Even though the wave pattern suggests a bearish trend, I believe that the bulls could launch a new offensive at any moment. Therefore, I will pay close attention to buy signals. Current pound prices are quite attractive for the bulls, and the broader fundamental backdrop still does not provide strong support for the bears in the medium term. Today, speeches from Huw Pill and Andrew Bailey in the UK will be important events to monitor.

On the 4-hour chart, the pair reversed in favor of the U.S. dollar following a "bearish" divergence on the CCI indicator and after the Bank of England and the Fed meetings. The downward movement continues toward the support zone of 1.3378–1.3435. A rebound from this zone will work in favor of the pound and some upward movement. A consolidation below the zone would favor a continuation of the decline toward the 76.4% corrective level at 1.3118.

Commitments of Traders (COT) Report:

The sentiment of the "Non-commercial" trader category became sharply more bullish in the last reporting week. The number of long positions held by speculators increased by 5,947 contracts, while short positions decreased by 21,078. The current spread between longs and shorts is about: 80,000 vs. 87,000. Bullish traders are once again shifting the balance in their favor.

In my view, the pound still has downward potential. The fundamental backdrop during the first half of the year was terrible for the U.S. dollar, but it is slowly improving. Trade tensions are easing, major deals are being signed, and the U.S. economy is expected to recover in Q2 thanks to tariffs and various domestic investments. At the same time, expectations of Fed easing in the second half of the year are starting to put real pressure on the dollar, with labor market performance worsening and unemployment rising. Therefore, I do not yet see grounds for a strong bearish trend.

Economic Calendar for the U.S. and UK:United Kingdom – Speech by Bank of England Governor Andrew Bailey (18:00 UTC).The economic events calendar for September 22 contains only one relevant item. The influence of the news background on market sentiment will appear primarily in the evening.

GBP/USD Forecast and Trader Tips:Selling the pair was possible on a rebound from the 1.3708 level on the hourly chart with targets at the 1.3611–1.3620 zone and the 1.3482 level — all targets were reached. Buying opportunities may be considered on a rebound from the 1.3416–1.3425 zone, or upon a close above the 1.3482 level on the hourly chart with a target at 1.3587.

Fibonacci grids are drawn from 1.3586–1.3139 on the hourly chart and from 1.3431–1.2104 on the 4-hour chart.