On the hourly chart, the GBP/USD pair has risen to the upper line of the descending trend corridor, which characterizes the traders' mood at this time as "bearish." The rebound from this line worked in favor of the US dollar and the resumption of the fall. Consolidating quotes below the Fibonacci level of 100.0% (1.2447) will increase the pair's chances of falling toward the 1.2342 level. Closing quotes above the corridor will allow us to count on the new growth of the British pound towards the 1.2546 level.
Yesterday, there were at least two important events for the pound. First, the Governor of the Bank of England, Andrew Bailey, spoke. In his speech, he expressed confidence that inflation will slow down in the UK in April. By the end of the year, he expects it to halve, i.e., about 5%. He also should have reported whether the Bank of England plans to continue tightening monetary policy and what it depends on. One can assume that it depends on inflation and the pace of its slowdown, but the Bank of England has raised the rate 12 times in a row, and inflation responded with a decrease of 1% and is still above 10%. Thus, the regulator will now wait for the impact of the high rate policy on the consumer price index to be realized and will take time with new tightenings.
Finance Minister Jeremy Hunt also said yesterday that the government fully supports the Bank of England. Hunt noted that only some existing tools could automatically lower inflation to the necessary level. All tools only influence economic processes, but it is only sometimes possible to achieve the desired result in the shortest possible time. The British currency grew in the second half of Wednesday, but neither Hunt nor Bailey made "hawkish" statements, so today, we are seeing its fall again.
On the 4-hour chart, the pair performed a new fall to the 1.2441 level. A new rebound from this level will favor the pound and the resumption of the uptrend toward the Fibonacci level of 100.0% (1.2674). Consolidating the pair's rate below the 1.2441 level will favor the US currency and the resumption of the fall toward the next corrective level of 127.2% (1.2250). No emerging divergences are observed today in any of the indicators.
Commitments of Traders (COT) report:
The sentiment of the "non-commercial" trader category over the last reporting week has become more "bullish." The number of long contracts in the hands of speculators increased by 12,900 units and the number of short ones – by 9,437. The overall sentiment of major players remains fully "bullish" (for a long time, it was "bearish"). Still, the number of long and short contracts is now almost equal – 71.5 thousand and 67 thousand, respectively. The British pound continues to grow predominantly, although very few factors support buyers. Since the ratio of long and short is almost equal, the pound cannot be considered overbought. The prospects for the British pound remain good, but soon a fall can be expected from it, as it has been growing for a long period.
News calendar for the US and UK:
USA - Philadelphia Fed Manufacturing Index (12:30 UTC).
USA - Initial Jobless Claims (12:30 UTC).
USA - Existing Home Sales (14:00 UTC).
On Thursday, the economic events calendar contained a few unimportant entries. The influence of the news background on traders' sentiment for the rest of the day will be weak.
GBP/USD forecast and tips for traders:
I advise selling the Briton on closing below 1.2441 on the 4-hour chart with a target of 1.2342. I recommend buying the pound on a rebound from the 1.2441 level on the 4-hour chart with a target of 1.2546. A fall in the pair is more likely.