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On the hourly chart, the GBP/USD pair made a sharp reversal in favor of the British currency on Thursday and rose to the resistance level of 1.3596–1.3620. A rebound from this zone today will favor the US dollar and a resumption of the decline toward the levels of 1.3513–1.3539 and 1.3428–1.3437. A consolidation above the 1.3596–1.3620 level will allow expectations for the continuation of the bullish trend.
The wave situation remains bullish. The last completed downward wave did not break the previous low, while the last upward wave broke the previous peak. Geopolitics provided the bears with almost complete dominance in the market for two months, after which the geopolitical backdrop supported the bulls for three weeks. Currently, the situation in the Middle East is contradictory but is shifting toward escalation of the conflict and a prolonged confrontation between Iran and the United States. The bullish trend is on the verge of breaking.
The news background on Thursday was very interesting and provided strong support to the bulls. The most important event—the Bank of England meeting—did not surprise with its results, but traders still detected hawkish notes in them. The British central bank left all monetary policy parameters unchanged, and even the MPC voting results matched forecasts. One committee member voted for a rate hike, while the rest supported keeping it at 3.75%. Nevertheless, rising inflation prompted bullish traders to become more active. The Bank of England, like the ECB, will be forced to raise rates if inflation continues to grow in April and May. At the same time, the Federal Reserve has not signaled readiness to tighten policy in the near future, and Jerome Powell even allowed for the possibility of rate cuts in 2026. Thus, the ECB and the Bank of England have taken a more hawkish stance than the Fed, allowing bulls to go on the offensive. However, this rally may be short-lived. After central bank meetings, the market will shift its focus back to geopolitics, where the balance is again tilting in favor of the dollar.
On the 4-hour chart, the pair has consolidated above the descending trend channel, which suggests a full-fledged bullish trend may develop. Consolidation above the Fibonacci level of 38.2% (1.3540) allows expectations for continued growth, but the chart pattern on the hourly timeframe is currently clearer, so I recommend paying closer attention to it. No emerging divergences are observed today.
Commitments of Traders (COT) report:
The sentiment of the "Non-commercial" trader category became less bearish over the last reporting week. The number of long positions held by speculators increased by 8,139, while short positions increased by 5,454. The gap between long and short positions is now effectively: 63 thousand vs. 115 thousand. For six consecutive weeks, non-commercial traders actively increased short positions and reduced long ones, leading to a strong imbalance between long and short positions. In recent weeks, bears have dominated, which is unsurprising given the geopolitical situation.
I still do not believe in a bearish trend for the pound, but now everything depends not on economic indicators, Trump's trade policy, or central banks' monetary policy, but on the duration, scale, and consequences of the war in the Middle East. In recent weeks, the market had shifted toward expectations of de-escalation, but recent news suggests that a full ceasefire is still far off, and the conflict could resume at any moment. In this case, the advantage of the bears could become even stronger.
News calendar for the US and the UK:
On May 1, the economic calendar contains only one, fairly important entry. The impact of the news background on market sentiment on Friday may be felt in the second half of the day.
GBP/USD forecast and trading tips:
Selling the pair is possible today if there is a rebound from the 1.3596–1.3620 level on the hourly chart, with targets at 1.3513–1.3539 and 1.3428–1.3437. Buying is possible if the price closes above the 1.3596–1.3620 level, with a target of 1.3700.
Fibonacci levels are constructed from 1.3866–1.3158 on the hourly chart and from 1.3012–1.3868 on the 4-hour chart.
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