FX.co ★ GBP/USD – July 10th: The British Pound Is Unaffected by the Prospect of a New War

On the hourly chart, GBP/USD rebounded on Thursday from the 76.4% Fibonacci retracement level at 1.3382 and resumed its upward movement toward the 1.3454–1.3457 resistance level. A rebound from this zone would favor the US dollar and a moderate decline toward 1.3382. A sustained move above the resistance level would increase the likelihood of further gains toward the next resistance level at 1.3526–1.3543.

The wave structure turned bullish last week. The latest completed downward wave broke below the previous low, while the new upward wave has surpassed the previous high and continues to develop. This suggests that buyers remain in control, although I had expected this shift to occur two to three weeks earlier. Nevertheless, better late than never. In my view, the bearish impulse that dominated in 2026 has now come to an end.

The fundamental backdrop was virtually nonexistent on Thursday. Only two secondary US economic reports were released, and neither had any meaningful impact on market sentiment. If three weeks ago it could be argued that the US dollar was strengthening without sufficient justification, the British pound is now displaying a similar move. In effect, the market has balanced itself out. First, the dollar appreciated without a clear catalyst, and now the pound is doing the same. As a result, sterling has returned to price levels that appear broadly consistent with its fair value.

Therefore, a corrective pullback may be expected in the near term. No major events are scheduled for Friday, and buyers cannot continue driving the market higher indefinitely on optimism alone. Geopolitical developments are also providing little pressure on the pound, as the market simply does not believe around 90% of the news coming from the Middle East. At present, it remains unclear whether negotiations will resume. Officially, neither Tehran nor Washington has announced the end of diplomatic efforts. However, Donald Trump stated that he "no longer sees any point in talking to Iran." At the same time, the US president has shown no urgency in resuming military operations. The pound is benefiting from the current environment and the temporary easing of tensions.

On the 4-hour chart, GBP/USD rebounded from the 100.0% Fibonacci retracement level at 1.3159, reversed in favor of the pound, and advanced toward the 50.0% Fibonacci level at 1.3409. Therefore, traders may expect the upward move to continue toward the next Fibonacci retracement level at 38.2% (1.3467). A rebound from 1.3467 would favor the US dollar and a moderate decline toward 1.3409 and 1.3348. No developing divergences are currently observed.

Commitments of Traders (COT) Report

Sentiment among the Non-commercial group became less bearish over the latest reporting week, although it remains bearish overall. The number of Long positions held by speculative traders declined by 3,623, while Short positions decreased by 7,195. The gap between Long and Short positions now stands at approximately 37,000 versus 139,000. Bears have dominated positioning in recent months. While this dominance was previously well supported by market conditions, it has become more questionable as the fundamental backdrop has changed significantly. The advantage of bearish positions remains more than threefold.

I still do not believe in a sustained bearish trend for the pound. However, in the near term, market direction will depend less on economic indicators, Trump's trade policy, or central bank monetary policy, and more on the duration, scale, and consequences of the conflict in the Middle East. In recent weeks, market sentiment has shifted toward expectations of peace. Nevertheless, negotiations between Iran and the United States could prove lengthy and difficult, and there is no guarantee they will end with the signing of a nuclear agreement.

Economic Calendar for the US and the UK

The economic calendar for July 10 contains no significant releases. Therefore, macroeconomic news is once again unlikely to influence market sentiment on Friday.

GBP/USD Forecast and Trading Tips

Short positions may be considered today if the pair rebounds from the 1.3454–1.3457 resistance level on the hourly chart, with downside targets at 1.3382 and 1.3335. Long positions were previously possible following a rebound from 1.3335, targeting 1.3382 and 1.3457. The first target has been reached, while the second has nearly been achieved. New long positions may be considered after a confirmed close above the 1.3454–1.3457 resistance level, with a target at 1.3526–1.3543.

Fibonacci retracement levels are drawn from 1.3457–1.3139 on the hourly chart and from 1.3158–1.3655 on the 4-hour chart.