30.01.202316:41 Forex Analysis & Reviews: GBP/USD. January 30. Pound waits for Bank of England meeting

On the hour chart, the GBP/USD pair rebounded from 1.2342 and reversed in favor of the British pound on Friday. Today, it continues to grow towards 1.2432. During the last two weeks, we got used to this kind of movement. In general, the price is moving sideways and a reversal from 1.2432 may trigger a decline to 1.2342.

The economic calendar does not include any important events today. There were a few reports in Spain and Germany but they have nothing to do with the British pound and the US dollar. On Tuesday and Wednesday, the pair may continue to move sideways as there will be no more news and reports tomorrow or the day after. On Wednesday, the Fed will announce the results of its meeting but after the press release from the regulator, a usual press conference with Jerome Powell is canceled. It could be a mistake but there is no corresponding entry in the economic calendar now. On the other hand, if there is a press conference, what will Powell tell traders? He can either keep his current, "not-so-hawkish," stance, or he can soften it. In both cases, his rhetoric is unlikely to support the US currency.

Meanwhile, if anything is to be expected, it should happen on Thursday or Friday. It is absolutely unclear what to expect from the Bank of England. On Friday, the reports on payrolls and unemployment in the US can seriously puzzle the US dollar bulls. There is every reason to assume that Nonfarm Payrolls will be weaker than last month, posting another decrease in the indicator, which has been falling for more than a year. Notably, it is still too early to talk about a recession in the US economy. However, the labor market indicators are slowly declining. The good thing is that the Fed has already raised the interest rate enough, so no strong tightening of QE is expected. Meanwhile, the US dollar needs support, and getting it from the US this week will be quite difficult.

On the 4-hour chart, the pair continues to grow towards 1.2441. The rebound of the quotes from this level will support the US currency and may drag the pair down to the Fibo level of 127.2%, 1.2250. If the pair closes above 1.2441, it is likely to grow toward the next correction level of 161.8%. No new emerging divergences are observed today.COT report:

Last week, the sentiment of non-commercial traders became less bearish than the week before. The number of long contracts owned by speculators decreased by 6,713, and the number of short ones plunged by 7,476. The sentiment of big players remains bearish, and the number of short contracts still exceeds the number of long ones. For the last several months, the situation was changing in favor of the British pound. However, the difference between the number of long and short contracts is almost doubled again. Thus, the prospects of the British pound worsened again. At the same time, the British currency is in no hurry to fall as the euro does. On the 4-hour chart, the GBP/USD pair has moved below the three-month ascending channel, and this may prevent GBP from continuing to grow.

US and UK economic calendars:

On Monday, the economic calendar does not contain any important entries. The information background is unlikely to influence the market sentiment today.

GBP/USD forecast and recommendations for traders:

You may sell GBP if the quotes rebound from 1.2432 on the hourly chart with the targets at 1.2342 and 1.2238. If the price closes above 1.2432, you may consider longs with the target of 1.2590, or if the price rebounds from 1.2342, the target will be 1.2432.