On the hourly chart, the GBP/USD pair on Thursday made another rebound from the 161.8% retracement level at 1.3110 and rose above 1.3186. At that moment, it might have seemed that the bullish advance would continue, but over the next 10 hours the quotes again returned to the support level of 1.3110–1.3139. Today we once again have to expect either a rebound from this zone or a close below it. In the latter case, the decline will continue toward the 200.0% Fibonacci level at 1.3024.
The wave situation remains bearish. The new upward wave did not break the previous peak, while the last downward wave (which formed over three weeks) broke the previous low. The news background in recent weeks has been negative for the US dollar (in my opinion), but bullish traders have not taken advantage of this opportunity to advance. Unfortunately for the pound, the news background has deteriorated recently, and it is now more difficult for the bulls to launch an attack. To complete the bearish trend, the pair needs to rise above 1.3470 or form two consecutive bullish waves.
For the fifth consecutive day, the pound has been stuck between 1.3110 and 1.3186 (with few exceptions). Despite weak economic reports out of the UK this week, the British pound has still tried to show growth, but each time the bulls retreated near 1.3186. What can we say, when UK unemployment has already risen to 5%, industrial production has fallen by 2%, the economy is growing extremely weakly, and Chancellor Rachel Reeves still cannot decide whether taxes need to be raised to avoid a budget deficit for the next fiscal year? It should be content with the fact that for the first time in two decades, the economic situation in the United States is raising major concerns—but the data coming from the UK indicate that this country also has plenty of problems. Therefore, until the pound closes above the corridor on the 4-hour chart, I would not expect strong growth from it.
On the 4-hour chart, the pair continues to fall within a downward trend channel. If a new bullish trend is starting now, we will gradually receive confirmations of this. I will begin to expect strong growth in the pound only after the quotes close above the channel. A close below the 76.4% retracement level at 1.3118 will again allow us to expect a decline toward the 61.8% Fibonacci level at 1.2925. No emerging divergences are visible today.
Commitments of Traders (COT) Report:
The sentiment of the "Non-commercial" trader category in the most recent reporting week became more bullish, but that reporting week was a month and a half ago. The number of long positions held by speculators increased by 3,704, while the number of short positions decreased by 912. The current gap between long and short contracts is approximately: 85,000 vs. 86,000. The bullish traders are once again tipping the scales in their favor.
In my view, the pound still has prospects for decline, but with each passing month the US dollar looks weaker and weaker. If previously traders worried about Donald Trump's protectionist policies, not realizing what results they could bring, now they may worry about the consequences of that policy: a possible recession, constant introduction of new tariffs, Trump's confrontation with the Federal Reserve, as a result of which the regulator could become "politically biased." Thus, the pound looks far less dangerous than the US currency.
News calendar for the USA and the UK:
On November 14, the economic calendar contains two fairly important entries. The news background will not influence market sentiment on Friday.
GBP/USD forecast and trading recommendations:
Selling the pair is possible today after a close below the 1.3110–1.3139 level on the hourly chart, targeting 1.3024, or after a rebound from 1.3186 targeting 1.3110. Long positions can be opened after a rebound from 1.3110 and 1.3139, with targets at 1.3186 and 1.3247.
The Fibonacci grids are built from 1.3247–1.3470 on the hourly chart and from 1.3431–1.2104 on the 4-hour chart.
