On the hourly chart, the GBP/USD pair on Thursday declined to the support level of 1.3199–1.3214. A rebound of quotes from this zone will favor the pound and some growth toward the resistance level of 1.3341–1.3352. A consolidation of quotes below the 1.3199–1.3214 level will favor a continuation of the decline toward the level of 1.3139 and the Fibonacci level of 161.8% at 1.3016.
The wave situation has once again shifted to "bearish." The last completed upward wave exceeded the previous peak by only a few points, while the last downward wave confidently broke the previous low. The news background remains weak for the pound, and geopolitics gives bears almost complete dominance in the market. The war in Iran remains the main reason for the strengthening of the U.S. currency in recent months. Bulls can only hope for the end of the war in the Middle East, a drop in oil prices, and a ceasefire by all parties to the conflict.
The news background on Thursday strongly supported the bears, as Donald Trump once again shocked the market with new threats against Iran. Despite the fact that the U.S. president regularly uses peaceful rhetoric, last night he again promised to destroy Iran and send it back to the Stone Age. Traders reacted unambiguously—with selling. Today, important reports on the U.S. labor market and unemployment will be released. In my opinion, this time they will have the status of "simply important," since Jerome Powell stated just this week that the FOMC committee is in a favorable position. This favorable position lies in the fact that the Federal Reserve can afford to wait and observe the development of the inflation process associated with the sharp rise in energy prices. Thus, unemployment and the labor market will not determine the outcome of the FOMC's monetary policy vote in the near future. Nevertheless, the reports remain important, and traders will not ignore them. Therefore, I expect increased trader activity in the second half of the day.
On the 4-hour chart, the pair consolidated above the downward trend channel, which gave the bulls absolutely nothing. A rebound from the 61.8% corrective level at 1.3340 was completed, followed by a reversal in favor of the U.S. dollar, and a new decline began. A consolidation of the pair below the Fibonacci level of 76.4% at 1.3215 will increase the probability of a further decline toward the level of 1.3044. No emerging divergences are observed in any indicator today.
Commitments of Traders (COT) report:
The sentiment of the "Non-commercial" trader category became even more bearish over the last reporting week. For seven consecutive weeks, non-commercial traders have been actively increasing sales and reducing purchases. The number of long positions held by speculators increased by 2,166, while the number of short positions decreased by 4,927. The gap between long and short positions is now effectively as follows: 46 thousand versus 105 thousand. In recent weeks, bears have dominated, which raises no questions given the geopolitical situation. I still do not believe in a long-term bearish trend for the pound, but now everything depends not on economic indicators, Trump's trade policy, or central bank monetary policy, but on the duration, scale, and consequences of the war in the Middle East.
Over the past year, the pound looked like a safer currency compared to the dollar—more stable and with a clearer economic future. However, in recent months, first a correction began while maintaining a bullish trend, and then the conflict in the Middle East started escalating almost daily. Geopolitics remains the only reason for the strengthening of the U.S. currency.
News calendar for the U.S. and the U.K.:
- U.S. – Change in Nonfarm Payrolls (12:30 UTC).
- U.S. – Unemployment rate (12:30 UTC).
On April 3, the economic calendar contains two important entries. The impact of the news background on market sentiment on Friday could be strong. If Trump makes new statements and threats, it could be doubly strong.
GBP/USD forecast and trading tips:
Selling the pair was possible on a rebound from the 1.3341–1.3352 level on the hourly chart with a target of 1.3199–1.3214. The target has been reached. New sales are possible upon closing below the 1.3199–1.3214 level with targets of 1.3139 and 1.3016. Buying today is possible on a rebound from the 1.3199–1.3214 level with a target of 1.3341–1.3352.
Fibonacci levels are built from 1.3341–1.3866 on the hourly chart and from 1.3012–1.3868 on the 4-hour chart.
