On the hourly chart, the GBP/USD pair on Wednesday rebounded from the corrective level of 127.2% (1.2917) and continued the growth process towards the Fibonacci level of 161.8% (1.3007), which it successfully reached. Today, the pair may consolidate above this level, increasing the chances of continued growth toward the next level of 1.3071. Three trend lines have already been formed, each with a steeper angle than the previous one. The "bullish" trend is strengthening, but this could play a cruel joke on it. Remember, the more rapid the movement, the faster it will end and the stronger the pullback.
The waves currently suggest a possible end to the "bullish" trend. There are no graphic signals for a reversal yet. The peaks and the lows continue to be updated. However, corrective waves are weakening, which cannot continue for long. A reversal signal soon and consolidation under the last trend line will work in favor of the US currency.
This week, traders have successfully ignored unemployment data from the UK. Today they ignored GDP and industrial production data. The US inflation report is undoubtedly more important, but the pair has been growing for three days, paying no attention to other events and reports. GDP volume in May decreased by 0.1%, while traders expected -0.2-0.3%. Industrial production fell by 0.6% with more optimistic forecasts. Thus, both reports can be considered negative, but the pound has been growing again since the morning. Such growth can only be stopped once the bullish traders are satisfied and start fixing profits.
On the 4-hour chart, the pair rebounded from the level of 1.2745 and consolidated above the level of 1.2860. Thus, the rise in quotes can be continued towards the next level of 1.3044. A "bearish" divergence is looming at the CCI indicator, which may indicate the start of forming a "bearish" wave on the hourly chart. A rebound of the quotes from the level of 1.3044 will also allow us to count on at least a small fall.
Commitments of Traders (COT) report:
The sentiment of the "Non-commercial" traders category has become less "bullish" over the last reporting week. The number of long contracts held by speculators decreased by 7921 units, but the number of short contracts also decreased by 6192. The overall sentiment of major players remains fully "bullish," and a twofold gap has formed between the number of long and short contracts: 96 thousand versus 46 thousand. The pound has good prospects for continued growth, and the information background currently supports it more than the dollar. However, it is becoming increasingly more work to expect strong pound growth. The market ignores many factors supporting the dollar, and the pound is growing only on expectations of new and new rate hikes by the Bank of England.
News calendar for the US and the UK:
UK - GDP growth rate (06:00 UTC).
UK - Change in industrial production volume (06:00 UTC).
USA - Producer Price Index (PPI) (12:30 UTC).
USA - Number of initial jobless claims (12:30 UTC).
On Thursday, the economic events calendar contains four entries, two already known and have not influenced the traders' sentiment. For the rest of the day, the influence of the information background may be weak.
GBP/USD forecast and advice for traders:
Only very small pound sales are possible on the "bullish" trend. For example, in the case of a rebound on the 4-hour chart from the level of 1.3044 with the target of 1.2860. Other signals can be considered if there are prerequisites for a reversal on the hourly chart. I advised buying when rebounding from the level of 1.2917 on the hourly chart with the target of 1.3007. The target has been worked out. Further purchases are risky.