On the hourly chart, the GBP/USD pair on Monday rebounded from the 23.6% Fibonacci level at 1.3313, turned in favor of the pound, and rose, closing above the resistance level of 1.3354–1.3357. Thus, the upward movement may continue toward the next 50.0% Fibonacci level at 1.3387. A consolidation of quotes below the 1.3354–1.3357 level would favor the U.S. currency and lead to a slight decline toward the 23.6% corrective level at 1.3313.
The wave situation remains "bullish." The last completed upward wave broke the previous high, while the last downward wave did not break the previous low. The information background in recent weeks has been negative for the U.S. dollar, yet bullish traders have not taken advantage of the opportunities presented. Now they are beginning to spread their wings, but they are doing so very slowly and uncertainly.
On Monday, there were no significant events or news in either the UK or the US, but the market is gradually turning its attention to the upcoming FOMC meeting, the results of which will be announced on Wednesday evening. Essentially, the outcome of the meeting is already known, as few doubt that the rate will be cut by 0.25%. However, have traders already priced in this FOMC decision? I believe not. Last week, the bears were on the offensive, which clearly does not align with the upcoming easing of the Fed's monetary policy. Overall, the trend remains bullish. The warming in U.S.–China relations may be temporary. The U.S. government "shutdown" continues. There is no labor market or unemployment data. The Fed will not limit itself to a single policy easing before year-end. In my view, bullish traders still have enough reasons to begin a new, prolonged offensive. On Tuesday, the news background will again be quiet, but now the dollar may continue to weaken in anticipation of tomorrow's Fed meeting, whose tone will likely be "dovish."
On the 4-hour chart, the pair rebounded from the 100.0% corrective level at 1.3435, which favored the U.S. currency and led to a slight decline. No emerging divergences are observed in any indicators. The hourly chart is currently more informative than the 4-hour one.
Commitments of Traders (COT) Report
The sentiment of the "Non-commercial" category of traders became more bullish over the last reporting week — although that week was a month ago. The number of long positions held by speculators increased by 3,704, while the number of short positions decreased by 912. The gap between long and short positions is now approximately 85,000 versus 86,000. Bullish traders are again tipping the scales in their favor.
In my opinion, the pound still retains downward potential, but with each passing month, the U.S. dollar looks weaker and weaker. Previously, traders worried about Donald Trump's protectionist policies, not knowing what results they might bring. Now they may worry about the consequences of those policies — a possible recession, the constant imposition of new tariffs, and Trump's conflict with the Fed, which could lead to the regulator becoming "politically biased." Thus, the pound currently looks far less risky than the U.S. currency.
News Calendar for the U.S. and the UK
On October 28, the economic calendar contains no notable entries. The information background will have no influence on market sentiment on Tuesday.
Forecast for GBP/USD and Trading Advice
Sales of the pair today will be possible if quotes close below the 1.3354–1.3357 level on the hourly chart, with targets at 1.3313 and 1.3247. Purchases could be considered after a rebound from the 1.3313 level, with targets at 1.3354 and 1.3387. These trades can be kept open today, setting the Stop Loss at breakeven.
Fibonacci grids are built from 1.3526–1.3247 on the hourly chart and from 1.3431–1.2104 on the 4-hour chart.
