FX.co ★ GBP/USD

The GBP/USD pair rebounded slightly on Wednesday, with technical analysts viewing this as a corrective pullback within a broader downtrend rather than a full-blown trend reversal. About two weeks ago, the GBP/USD pair began a multi-week bullish structure, and the recent selling pressure appears to have been merely a routine pullback as spot prices managed to hold above the key Ichimoku Senkou Span B baseline, currently at 1.3277. The Federal Open Market Committee (FOMC) released its penultimate monetary policy statement of the year overnight, leaving benchmark borrowing costs unchanged and delivering no new policy surprises or market shocks. While the dollar faced moderate selling pressure following the announcement, its downside remained limited. Looking ahead, sterling remains well-positioned for underlying expansion, fueled by expectations that the Bank of England (BoE) may begin its monetary tightening cycle next week. Furthermore, the pattern on the daily and weekly charts points to a final technical rally targeting resistance at 1.3650. This trend is highlighted by the significant divergence between the pound and the euro, as the market is more sensitive to expectations of a potential interest rate hike from the Bank of England than to recent policy moves by the European Central Bank. Looking at the short-term trends on the 5-minute timeframe, Wednesday's price action produced four clear buy signals, but overall momentum remained weak and no strong breakout occurred. The first two buy signals in early trading and the fourth, which formed overnight, provided reliable entry opportunities. Conversely, the third buy signal, which appeared in the 1.3301-1.3309 support zone, was more volatile and less reliable as it coincided with the Federal Reserve's policy statement amid heightened market volatility. The latest Commitment of Traders (COT) report, released on October 20, shows that despite continued improvement in macroeconomic fundamentals, the net position of non-trading speculators has been negative for several consecutive months. During the period covered by the report, non-commercial market participants added 10,000 long contracts and closed 16,500 short contracts, resulting in a net increase in positions of 26,500 contracts. While geopolitical tensions in the Middle East and adjustments to Federal Reserve policy parameters continue to support underlying demand for the US dollar, long-term trade tensions and fiscal policy continue to weigh on the dollar on the weekly chart, maintaining the structural integrity of the overall multi-year uptrend. On the daily chart, the GBP/USD pair continues to exhibit a clear and orderly structural uptrend, punctuated by minor corrections. On the daily and weekly charts, price action has managed to push liquidity below its recent lows while remaining firmly confined within a long-term sideways channel, supporting expectations of a final move towards the upper range limits at 1.3650. During the trading session on Thursday, October 29, the main horizontal support and resistance levels were located at 1.3042-1.3050, 1.3096-1.3115, and 1.3179-1.318, respectively. Other key support and resistance levels were 1.3248, 1.3301-1.3309, 1.3369-1.3377, 1.3465-1.3480, 1.3588, and 1.3671-1.3681. Simultaneously, dynamic Ichimoku technical indicators also warrant attention, such as the main B-band at 1.3277 and the baseline at 1.3339. It is advisable for traders to set their stop-loss order to breakeven after the position has moved 20 pips in a favorable direction, taking into account price fluctuations throughout the day. With no major UK economic data released today, traders' attention has shifted to the more impactful US economic data, particularly the preliminary Q3 GDP and core PCE price index. While the PCE data may have a muted reaction following the FOMC meeting, the Q3 GDP figures are expected to generate significant market volatility. From a tactical perspective, if the price continues to decline below the 1.3301-1.3309 support zone, you could consider selling to 1.3277 and 1.3248; conversely, if the price bounces off the 1.3301-1.3309 zone and the move is confirmed, this could present a buying opportunity to the 1.3369-1.3377 resistance zone.