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On the hourly chart, the GBP/USD pair on Monday made another pullback to the support level at 1.3352–1.3362. Today, a consolidation of prices below this zone would increase the likelihood of a continued decline toward the next corrective level at 61.8% – 1.3294. A new rebound from the 1.3352–1.3362 level would favor the pound and a resumption of the bullish trend toward the 1.3425 level.
The wave structure turned bullish several weeks ago. The most recently completed upward wave broke above the previous peak, while the latest downward wave failed to break the previous low. Thus, the trend currently remains bullish. The news background for the pound has been weak in recent weeks, but the bears have already fully priced it in, while the news background in the U.S. also leaves much to be desired. It is difficult for bulls to continue their attacks, but their positions are currently stronger than those of the bears. The end of the bullish trend can only be confirmed below the 1.3294 level.
There was no significant news background on Monday, but today three UK reports have already been released and deserve a closer look. I will say right away that the market reaction to the economic data was a restrained rise. This suggests that the UK reports should have been positive. However, this is a rather debatable statement. The unemployment rate rose from 5.0% to 5.1%, which generally matched market expectations. The number of new unemployed increased by 20 thousand, also broadly in line with forecasts. Wages rose by 4.7% including bonuses, which significantly exceeded traders' expectations. In my view, it was this last report that caused the modest rise in the pound. If wages are rising—and faster than expected—then inflation may also accelerate. Let me remind you that the Bank of England is counting on a slowdown in inflation, which would allow it to continue easing monetary policy. Therefore, the fate of the MPC interest rate decision on Thursday has not yet been sealed. Moreover, a UK inflation report will be released before Thursday, which could change market expectations regarding the rate.
On the 4-hour chart, the pair consolidated above the descending trend channel, above the 1.3118–1.3140 level, and rose to the 100.0% Fibonacci correction level at 1.3435. A rebound from this level worked in favor of the U.S. dollar and the start of a decline toward 1.3140. A consolidation above 1.3435 would open the door to further growth toward the 127.2% Fibonacci level at 1.3795. No emerging divergences are observed today.
Commitments of Traders (COT) Report
The sentiment of the "Non-commercial" trader category did not change over the last reporting week, but that reporting week was a month ago—dated November 18. The number of long positions held by speculators increased by 766, while the number of short positions decreased by 981. The gap between long and short positions now stands at approximately 53 thousand versus 132 thousand. As we can see, bears dominated a month ago, but the situation may now be completely different. In the euro, the situation was the opposite even a month ago. Therefore, I do not believe the market for the pound is currently bearish.
In my view, the pound still looks less "dangerous" than the dollar. In the short term, the U.S. currency occasionally enjoys demand in the market, but I believe this is a temporary phenomenon. Donald Trump's policies have led to a sharp deterioration in the labor market, and the Fed is forced to ease monetary policy in order to halt the rise in unemployment and stimulate job creation. For 2026, the FOMC does not plan aggressive monetary easing, but at the moment no one can be sure of this, as labor market statistics are still lacking.
News Calendar for the U.S. and the UK
United Kingdom
United States
On December 16, the economic calendar contains eleven events, three of which have already been released. The impact of the news flow on market sentiment on Tuesday will be strong throughout the day.
GBP/USD Forecast and Trading Advice
Short positions can be opened after a close below the 1.3352–1.3362 level on the hourly chart, with a target at 1.3294. Long positions may be considered today on a rebound from the 1.3352–1.3362 level on the hourly chart, with targets at 1.3425 and 1.3470.
Fibonacci grids are drawn from 1.3470–1.3010 on the hourly chart and from 1.3431–1.2104 on the 4-hour chart.
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