On the hourly chart, the GBP/USD pair on Tuesday executed a reversal in favor of the US dollar and returned to the support zone of 1.2584–1.2611. A new rebound from this zone will again favor the European currency and some growth towards the resistance zone of 1.2705–1.2715. Consolidating the pair's rate below the specified zone will increase the probability of further decline towards the level of 1.2517. The descending trend channel continues to characterize traders' sentiment as "bearish."
The wave situation recently does not raise questions. The last completed upward wave failed to reach the peak of the previous wave, and the new downward wave (which is forming at the moment) easily broke the last low (from March 19). Thus, the GBP/USD pair trend is currently "bearish." There are no signs of its completion; it has only just begun. The first sign of bulls turning the tide could be a breakout of the peak from March 21. However, bulls must overcome a distance of about 200 points to reach the zone of 1.2788–1.2801, which may take a long time given the current trader activity.
On Tuesday, the information background was absent in Great Britain, and in the US, only one report was released, which allowed the dollar to recover to 1.2611. Durable goods orders volumes grew stronger than traders expected, but the overall information background currently supports only the dollar. I remind you that bulls have dominated the market for quite some time (as seen on the daily chart), but sooner or later, they had to start retreating. The Fed is still in no hurry to soften the monetary policy stance, while the Bank of England has begun signaling readiness for rate cuts. Such a background largely plays into the hands of bears rather than bulls.
On the 4-hour chart, the pair executed a new reversal in favor of the Briton and consolidated above the level of 1.2620 after forming a "bullish" divergence with the CCI indicator. Thus, the growth process may continue towards the next corrective level of 61.8%-1.2745. There are no new emerging divergences with any indicators. But the key zone now is 1.2584–1.2611 on the hourly chart. Consolidation below will increase the probability of the British pound's decline.
Commitments of Traders (COT) Report:
The "Non-commercial" trader category sentiment for the last reporting week has become less "bullish." The number of long contracts held by speculators decreased by 20680 units, while the number of short contracts decreased by 3429. The overall sentiment of major players remains "bullish" and continues to strengthen, although I do not see any specific reasons for this. There is a more than twofold gap between the number of long and short contracts: 102 thousand versus 49 thousand.
The prospects for a decline in the British pound persist, but over the past 2.5 months, the number of Long contracts has increased from 66 thousand to 102 thousand, while the number of Short contracts has remained almost unchanged. Over time, bulls will start to unwind their Buy positions, as all possible factors for buying the British pound have already been exhausted. However, bears continue to demonstrate their weakness, which prevents the pound from starting to fall. The total number of long and short contracts has been almost the same for several months, indicating overall market balance.
News Calendar for the US and Great Britain:
On Wednesday, the economic events calendar contains only some important entries. The influence of the information background on market sentiment today will be absent.
Forecast for GBP/USD and Trader Advice:
The British pound can be considered today on consolidation below the zone of 1.2584–1.2611 with targets at 1.2517 and 1.2453. Purchases are possible on a rebound on the hourly chart from the zone of 1.2584–1.2611, with the target being the upper line of the descending corridor. Consolidation above the corridor will allow maintaining purchases with the target zone of 1.2705–1.2715.
