17.03.202512:30 Forex Analysis & Reviews: GBP/USD. March 17th. Bulls Pin Their Hopes on Jerome Powell

On the hourly chart, the GBP/USD pair continued to trade sideways on Friday. This sideways movement persists on Monday, with trading activity remaining extremely low. Monday's news background is weak, and in these conditions, the 1.2931 level carries little significance. With no market activity, any trading signal is unlikely to trigger strong movement.

The wave structure is completely clear. The last completed downward wave failed to break below the previous low, while the last upward wave surpassed the previous peak. Thus, at the moment, we can consider that a bullish trend is forming. The British pound has been showing strong growth recently, even excessively strong. The news background does not seem strong enough to justify such relentless bullish pressure. However, most traders are unwilling to buy the U.S. dollar regardless of economic data, as Donald Trump is introducing new tariffs every other day, which will negatively impact U.S. economic growth and that of many other countries.

The news flow on Friday was mixed, but traders avoided active trading unless it involved Trump-related developments. Since the U.S. president refrained from introducing new tariffs, the market decided to wait until next week. This week, however, both the Bank of England and the Federal Reserve will hold their monetary policy meetings. The main intrigue lies in the speeches of Andrew Bailey and Jerome Powell, as monetary policy parameters are very likely to remain unchanged. Jerome Powell may express concerns about a slowdown in the U.S. economy due to Trump's actions, and as a result, he could adopt a much more dovish stance than before. This would be very bad news for the dollar, if not an outright disaster. As we can see, very few traders are currently willing to buy the U.S. dollar, even within a retracement. Traders lack confidence in the U.S. economy, and under Donald Trump, the dollar has been steadily declining.

On the four-hour chart, the pair continues its upward movement. I do not expect a significant decline in the British pound unless quotes close below the upward channel. The CCI indicator has formed a bearish divergence, which has not yet impacted bullish positions. A rebound from the 1.2994 level suggests a potential decline in the pound toward the 50.0% Fibonacci level at 1.2861, but there are no active sellers in the market.

Commitments of Traders (COT) Report:

The "Non-commercial" trader category has become more bullish over the last reporting week. The number of long positions held by speculators increased by 12,920, while the number of short positions increased by only 2,301. Bears have lost their market advantage. The gap between long and short positions now stands at nearly 30,000 in favor of bulls (95,000 vs. 66,000).

In my view, the British pound still has room for a decline, but recent market developments could lead to a longer-term reversal. Over the past three months, the number of long positions has decreased from 98,000 to 94,000, while the number of short positions has fallen from 78,000 to 66,000. However, more importantly, over the last six weeks, the number of long positions has surged from 59,000 to 95,000, while short positions have dropped from 81,000 to 66,000. Let's not forget—this has been during Trump's six weeks in office.

Economic Calendar for the U.S. and the U.K.:

U.S. – Retail Sales Change (12:30 UTC).

On Monday, the economic calendar includes only one event, which is unlikely to encourage traders to become more active. As a result, the news background's impact on market sentiment is expected to be weak.

GBP/USD Forecast and Trading Recommendations:

Selling the pair was possible after a rebound from the 1.2994 level on the four-hour chart, with targets at 1.2931 and 1.2865. These trades can remain open, but market activity is virtually nonexistent. Buying is possible if the price rebounds from 1.2931 on the hourly chart, but in a sideways market, movements are minimal. As a result, new signals may not play out as expected.

Fibonacci retracement levels are based on the 1.2809 – 1.2100 range on the hourly chart and the 1.2299 – 1.3432 range on the four-hour chart.