On the hourly chart, on Wednesday, the GBP/USD pair completed its rise to the Fibonacci level of 100.0% (1.2447), favoring the US dollar. Today, the pair once again rebounded from the 1.2447 level, which allows us to expect a resumption of the decline toward the 1.2342 level. Fixing the pair's quotes above 1.2447 will favor the British currency and new growth towards the 1.2546 level.
Yesterday was a very important day for the British currency, the most important of the week, and traders may need several days to digest all the information received. There needed to be more information, but it is extremely important for the British currency and economy. The consumer price index in March did not meet traders' expectations and fell only to 10.1%. Core inflation remained unchanged at 6.2%. These figures can only mean one thing: inflation is still hardly slowing down. This is very bad news for the Bank of England, whose governor stated that he expects inflation to fall to 2.9% by the end of the year. I do not understand what factors and indicators the Bank of England expects inflation to fall more than three times in nine months. Each new report shows either a minimal slowdown or new growth. Under the current circumstances, only new interest rate hikes can save the Bank of England. However, traders expected a pause from the British regulator last month, and the regulator decided to raise the rate by only 0.25%. Thus, a maximum increase of 0.25% can be expected at the next meeting, which will be insufficient for inflation to accelerate downward. The growth of the British pound is unlikely to be above the 1.2546 level; rather, a decline will begin against such an informational background.
On the 4-hour chart, the pair completed a reversal in favor of the US dollar and fixed below the ascending trend corridor and the 1.2441 level. I believe the exit from the corridor is a very important graphic signal, indicating a change in sentiment to "bearish." The "bullish" divergence allowed a return to the 1.2441 level, but a rebound from it will again work in favor of the US currency and a resumption of the decline towards the Fibonacci level of 127.2% (1.2250). Exiting two ascending corridors at once speaks volumes.
The Commitments of Traders (COT) report:
The sentiment of the "non-commercial" category of traders changed significantly during the last reporting week. The number of long contracts held by speculators increased by 8513 units, while the number of short contracts increased by 3882. The overall sentiment of major players remains "bearish," and the number of short-term contracts still exceeds the number of long-term contracts. But only slightly. Ironically, at this time, the market sentiment may change to "bearish," as there are quite specific sell signals. Over the past few months, the situation has consistently changed in favor of the British currency, but nothing lasts forever. Thus, the prospects for the pound remain good, but in the near future, its decline should be expected.
The economic calendar for the US and the UK:
US - Philadelphia Fed manufacturing activity index (12:30 UTC).
USA- initial jobless claims (12:30 UTC).
On Thursday, the economic event calendars contain two entries that can be considered important. The impact of the informational background on traders' sentiment for the rest of the day will be weak.
GBP/USD forecast and advice for traders:
I recommend selling the British currency with targets at 1.2342 and 1.2295 in case of a rebound from the 1.2441-1.2447 levels. Buying the British currency will be possible upon closing above the 1.2447 level on the hourly chart with a target of 1.2546.