On the hourly chart, the GBP/USD pair rebounded from the 1.2546 level and resumed growth towards the Fibonacci level of 127.2% (1.2623). A rebound in quotes from this level will allow traders to expect a reversal in favor of the US currency and a return to the 1.2546 level. Closing above the 1.2623 level will further increase the chances of continued growth toward the next level of 1.2718.
For the pound, yesterday was quite boring, as the ECB meeting was supposed to have a greater impact on the euro. The euro could have pulled the pound along with it, which happens quite often in the market, but this time it did not. The UK Services PMI rose from 52.9 points to 55.9 points in April. The composite index increased from 52.2 to 54.9. The pound did not grow in the first half of the day, but it grows confidently even without it.
Today, US statistics are extremely important. The reports themselves are very important. Under the influence of tightening monetary policy, the US economy continues to slow down, as does the labor market. Traders, however, perceive information about rising unemployment, a reduction in vacancies, or a negative decrease in the number of new jobs. Bulls currently dominate the market, waiting for a new reason to open buy deals. Even neutral reporting from the US can lead to a dollar decline today.
If we return to the issue of rates, the pound no longer has the support of the information background. I have almost no doubt that the Bank of England will soon complete the tightening process, which should cause the pound to fall. Perhaps next week, the current rate will be announced as unchanged.
On the 4-hour chart, the pair completed consolidation below the ascending trend corridor, which allows for a change of sentiment to "bearish." However, the rebound from the 1.2441 level worked in favor of the pound and resumed growth towards the Fibonacci level of 100.0% (1.2674). The emerging "bearish" divergence in the CCI indicator allows us to expect a reversal in favor of the US dollar and a return to the 1.2441 level. A decline in the pair would be logical under the current circumstances.
Commitments of Traders (COT) report:
The sentiment of the "non-commercial" category of traders became more "bullish" over the last reporting week. The number of long contracts held by speculators increased by 5571 units, and the number of short contracts increased by 1034. The overall sentiment of major players is now fully "bullish" (it has been "bearish" for a long time), but the number of long and short contracts is now almost equal – 59 thousand and 53 thousand, respectively. The pound continues to grow predominantly but is doing so much more slowly than a few months ago. The pound's prospects remain good, but soon, it can be expected to fall. The information background no longer supports the bulls as it did before.
News calendar for the US and the UK:
UK - Construction PMI (08:30 UTC).
US - Average Hourly Earnings (12:30 UTC).
US - Non-Farm Employment Change (12:30 UTC).
US - Unemployment Rate (12:30 UTC).
On Friday, the economic events calendar contains several interesting entries, the most important being the American ones. The influence of the information background on the mood of traders today may be strong again.
GBP/USD forecast and advice for traders:
I recommend selling the pound with targets of 1.2546 and 1.2470 in case of a bounce from the 1.2623 level on the hourly chart. Buying the pound was possible with a bounce from the 1.2447 level, with targets of 1.2546 and 1.2575. Both targets have been reached. The next target of 1.2623 is almost reached as well.