The wave picture remains bullish. The most recently completed upward wave broke above the previous high, while the new downward wave has not yet even approached the last low. The news background for the pound has been weak in recent months, but the news flow from the U.S. has been even worse. Bulls regularly receive support from Donald Trump, which contributes to the strengthening of the British currency. A breakdown of the current trend can be identified only after two consecutive bearish waves.

The information background on Friday consisted solely of economic events, as traders did not see the expected U.S. attack on Iran. On Saturday, a new U.S. government shutdown began due to a lack of agreement between Democrats and Republicans over funding for U.S. Immigration Services, whose operations have already been linked to at least two civilian deaths. Funding for the service was eventually extended for two weeks, while funding for other government agencies was approved by the Senate. The remaining step is approval by Congress (the House of Representatives).

Since no sessions were held over the weekend, the required vote will take place today. Therefore, the shutdown is likely to end as early as Monday. There is little doubt that the House of Representatives will approve the 2026 funding bill, as Republicans hold a majority. However, these developments are unlikely to be the reason behind the moderate strengthening of the U.S. dollar seen over the past few days, nor are they likely to drive further dollar appreciation. Today, traders' attention should be focused on the U.S. ISM Manufacturing Index.

On the 4-hour chart, the pair rose to the 127.2% Fibonacci level at 1.3795 and rebounded from it. As a result, in the coming days we may see a decline toward the 1.3369–1.3435 support level. A firm break above 1.3795 would allow expectations of a continuation of the bullish trend toward 1.4020. No emerging divergences are currently observed, but the RSI indicator is overbought, which triggered a natural corrective pullback.

Commitments of Traders (COT) Report

Sentiment among the non-commercial trader category became more bullish over the latest reporting week. The number of long positions held by speculators increased by 6,454, while short positions rose by only 636. The current gap between long and short positions is approximately 87,000 versus 104,000, and it is narrowing rapidly.

Bears have dominated in recent months, but they appear to have exhausted their potential. At the same time, the situation with euro currency contracts is the opposite. I still do not believe in a bearish trend for the pound.

In my view, the pound continues to look less "dangerous" than the dollar. In the short term, the U.S. currency may occasionally benefit from demand, but not in the long term. Donald Trump's policies have led to a sharp deterioration in the labor market, forcing the Federal Reserve to ease monetary policy in order to curb rising unemployment and stimulate job creation. U.S. military aggression also does little to inspire optimism among dollar bulls.

Economic Calendar (UK & U.S.)

• United Kingdom – Manufacturing PMI (09:30 UTC)
• United States – Manufacturing PMI (14:45 UTC)
• United States – ISM Manufacturing PMI (15:00 UTC)

The economic calendar for February 2 contains three events, with the U.S. ISM index standing out as the most significant. The impact of the news background on market sentiment on Monday is expected mainly in the second half of the day.

GBP/USD Forecast and Trading Advice

Selling the pair was possible after a rebound from the 1.3845 level on the hourly chart, with targets at 1.3755 and 1.3620. The first target has been reached, and positions may remain open.

Buy positions can be opened after a rebound from the 1.3611–1.3620 level on the hourly chart, targeting 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.