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On the hourly chart, the GBP/USD pair traded mostly sideways throughout Wednesday. Today, the price has moved up again toward the resistance zone of 1.2709–1.2734, marking its second approach in recent days. A new rebound from this zone would once again favor the US dollar, potentially leading to a decline toward the support area of 1.2611–1.2620. If the pair consolidates above the 1.2709–1.2734 zone, it could increase the likelihood of further growth toward the 1.2788–1.2801 level.
The wave analysis is clear. The most recent upward wave broke the previous wave's peak by just 30 points, while the last downward wave failed to break the previous low. This suggests the potential conclusion of the bearish trend. However, as long as bears defend the 1.2709–1.2734 zone, they retain some control over the market. Any bullish trend that may emerge is likely to be weak. In the long term, a decline in the pound remains likely.
On Wednesday, Jerome Powell delivered a speech late in the day, while Andrew Bailey, Governor of the Bank of England, spoke earlier in the morning. Bailey's comments, which indicated that the Bank of England might lower rates four times next year, sparked some market activity. However, traders appeared uncertain about how to interpret this information. Following his remarks, bears initiated an aggressive move, but they quickly retreated under pressure from the bulls. By the end of the day, the pound experienced modest growth. However, today's trading may bring renewed declines, as the 1.2709–1.2734 zone remains a strong resistance level.
The US ISM Services PMI dropped significantly in November, falling from 56.0 to 52.1. This 4-point decline is substantial and explains the downward pressure on the US dollar during the second half of Wednesday. With a relatively light economic calendar today, bulls may struggle to breach this key resistance.
On the 4-hour chart, the pair rebounded from the 1.2728 correction level, then from 1.2620, before returning to 1.2728. Another rebound from this level would favor the US dollar. This level aligns with a strong resistance zone on the hourly chart. Currently, no indicators are signaling impending divergences. I recommend focusing on the hourly resistance zone for trading decisions.
The latest COT report shows that sentiment among Non-commercial traders has become less bullish. Speculators reduced their long positions by 18,279 positions while trimming short positions by 2,544 positions. Bulls still hold a significant advantage, with 102,000 long positions compared to 61,000 short positions—a gap of approximately 40,000 positions.
Over the past three months, the number of long positions has declined from 102,000 to 101,000, while short positions have increased from 55,000 to 62,000. This suggests that professional traders are gradually reducing their long positions or increasing their shorts, as most positive factors for the pound have already been priced in. Technical analysis also supports a further decline in the pound.
US – Initial Jobless Claims (13:30 UTC).Thursday's economic calendar contains only one entry, which suggests that economic data may have minimal influence on market sentiment today.
Short positions on the pair were valid following a rebound from the 1.2709–1.2734 zone on the hourly chart, with a target at 1.2611–1.2620, which has been achieved. New short positions can be considered after another rebound from the 1.2709–1.2734 zone. At this time, I would not recommend considering long positions.
Fibonacci levels are drawn from 1.3000 to 1.3432 on the hourly chart and from 1.2299 to 1.3432 on the 4-hour chart.
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