GBP/USD continues to rise, which I consider entirely justified. Reports on the U.S. economy, labor market, and inflation have largely settled the debate over whether the FOMC will raise interest rates in September. Nonfarm Payrolls declined for the fourth consecutive month and fell below zero. The U.S. economy is slowing, while inflation is declining. The situation could change based on the August data, but at present, the FOMC is much closer to maintaining a wait-and-see stance than to making hawkish decisions. The U.S. Treasury's decision to increase the volume of Treasury buybacks must also now be taken into account. This is a clear signal to the market that the budget is under pressure and is no longer coping with the burden. Under Donald Trump, the national debt is growing rapidly, which does not increase investor and trader confidence in U.S. securities or the dollar.

Do bears have any prospects at present? In my view, no. In previous articles, I noted that the liquidity sweep of the July 15 high did not look convincing, while bullish imbalance 26 serves not only as an area of interest for bulls but also as a support zone. A new buy signal was formed this week, giving traders an opportunity to open new long positions, which are already showing a profit of around 100 points. Since June 24, the pound has generated three buy signals and has also provided an early warning of the upcoming markup phase (liquidity sweeps). The bears, meanwhile, currently have neither a pattern nor a signal. At this point, bears can only count on a corrective pullback, which could begin after liquidity is swept from the May 1 high.

As I have already noted, geopolitics is no longer having a favorable impact on the dollar, as negotiations between the United States and Iran have become completely deadlocked. Officially, Tehran is negotiating only with Oman. It remains unclear what these negotiations will lead to in terms of ending the conflict and reopening the Strait of Hormuz. Iran may be able to agree with Oman on terms for controlling the Strait of Hormuz, but how would this resolve the conflict with the United States and lift the U.S. blockade of the strait?

This week, oil prices rose to $95 per barrel and, in my view, will return above $100 in the near future. If that happens, inflation in the United States or the United Kingdom will begin accelerating again. The Bank of England is prepared to tighten monetary policy, while the Fed's stance raises doubts about its readiness to adopt a hawkish decision. This is the key difference. The pound has an advantage over the dollar in terms of monetary policy.

The chart analysis shows a new bullish advance. At present, traders have three bullish imbalances (25, 26, and 27) where long positions can be considered. Naturally, the main focus should be on the latest and nearest imbalance to the current price, 27, which formed only yesterday. A liquidity sweep of the May 1 high could trigger a corrective pullback, and this pullback could extend below imbalance 27. Therefore, I recommend opening new long positions in imbalance 27 or imbalance 26 only after confirmed signals are formed, rather than simply when the price reaches the area of interest.

The economic news flow on Friday once again supported bullish traders, but by the end of the week they were clearly running out of momentum. The pound sterling has risen by 360 points over the past few weeks with virtually no interruption. Therefore, traders no longer had enough momentum to continue buying the pound even after relatively strong business activity indices for the UK services and manufacturing sectors. I am not even considering the U.S. business activity indices, as the market places greater emphasis on the ISM indices.

The overall fundamental backdrop remains such that, in the long term, I see little reason to expect anything other than a decline in the U.S. currency. The war between Iran and the United States has changed nothing in this regard. The possibility of Fed rate hikes in 2026 has not changed this outlook either. Geopolitical developments prompted the market to remember the dollar's safe-haven status for several months, but the conflict has already passed its active phase. The chances of FOMC monetary policy tightening have declined significantly in recent weeks, putting pressure on the U.S. currency. Thus, in my view, any rise in the dollar is temporary and driven by short-term factors. I see no reason for a new bearish advance.

Economic Calendar for the US and UK:

The economic calendar for August 24 contains no notable events. The economic background is expected to have no impact on market sentiment on Monday.

GBP/USD Forecast and Trading Tips:

The long-term outlook for the pound remains bullish. After liquidity sweeps of the two most recent swings and the formation of a series of buy signals, the bulls continue to advance. I still see no basis for a bearish attack, as there are no bearish patterns or signals. The bulls received a buy signal from imbalance 24, which remains valid. Traders can already consider taking profit on this signal. A new buy signal was formed within imbalance 26. The current target for the pound is the January 27 high at 1.3867. A liquidity sweep of the May 1 swing could push the pound slightly lower, but it is unlikely to disrupt the bullish advance.