On the hourly chart, the GBP/USD pair has consolidated below the ascending trendline, which allows counting on forming a "bearish" trend. The decline in quotes may continue today towards the support zone of 1.2584–1.2611. Consolidating the pair's rate below this zone will increase the probability of further decline in the British pound, which I expect.
The wave situation remains very ambiguous. For a long time, we observed horizontal movement, during which, almost all the time, single waves or triplets were formed, alternating with each other and having approximately the same size. The sideways movement is completed, but we continue to see the same single waves and triplets that constantly alternate. And even confidence in the completion of the sideways movement diminishes every day. At the moment, the next upward triplet is presumably completed, but there are no wave signs of a shift to a "bearish" trend yet. Having them will take at least a few days. The only sign of the bears going on the offensive is closing below the trendline.
There were a few interesting events on Tuesday in Britain and the United States. Traders could only pay attention to the same report on durable goods orders in the United States, significantly worse than even the weakest forecasts. Nevertheless, the bulls did not see fit to seize the opportunity for new purchases, which signals their loss of initiative. Today in America, the GDP report for the fourth quarter will be released, which is unlikely to support either bulls or bears. The value of the second estimate is likely to coincide with the value of the first estimate – 3.3%. Thus, the market may lack a reaction during the day. And there will be nothing for traders to react to throughout the day.
On the 4-hour chart, the pair has consolidated above the trendline and the level of 1.2620, allowing counting on the continuation of growth towards the corrective level of 61.8%–1.2745. However, one should not expect a new "bullish" trend now. A horizontal vector of movement is now perfectly visible on all charts. The "bullish" trend may have already ended, as on the hourly chart, bears closed below the ascending corridor. No impending divergences are observed in any indicator today.
Commitments of Traders (COT) Report:
The sentiment of the "Non-commercial" trader category did not change much over the last reporting week. The number of long contracts in the hands of speculators decreased by 2943 units, and the number of short increased by 1217 units. The overall sentiment of major players remains "bullish" and continues to strengthen, although I do not see any specific reasons for this. There is more than a two-fold gap between the number of long and short contracts: 87 thousand versus 41 thousand.
The prospects for the British pound to fall remain excellent. Over time, bulls will start getting rid of buy positions, as all possible factors for buying the British pound have already been worked out. For two months, bulls have failed to push the level of 1.2745, but bears are also not in a hurry to go on the offensive and are generally very weak now. The total number of long and short has coincided for several months, indicating market equilibrium.
News Calendar for the US and the UK:
US – Change in GDP in the second quarter (15-30 UTC).
On Wednesday, the economic events calendar contains only one entry. The impact of the information background on the market sentiment today will be weak.
Forecast for GBP/USD and trader advice:
Sales of the British pound could be considered when the pair consolidates below the ascending trendline on the hourly chart with a target of 1.2584. These deals can be kept open now. Purchases on the hourly chart will be possible with a rebound from the zone of 1.2584–1.2611 with a target of 1.2715.
