On the hourly chart, the GBP/USD pair rebounded from the 127.2% Fibonacci retracement level at 1.3003 on Wednesday, followed by a slight decline. Shortly after, the pair returned to 1.3003 and rebounded again. This has led to a reversal in favor of the U.S. dollar, initiating a new downward movement towards 1.2931. A firm consolidation above 1.3003 would increase the likelihood of further growth towards the next level at 1.3151.

The wave structure is completely clear. The last completed downward wave failed to break the previous low, while the latest upward wave broke the previous peak. This suggests that the bullish trend is still forming. The British pound has shown very strong growth recently, even excessively strong. The fundamental backdrop is not strong enough to justify such aggressive buying by bulls. However, most traders are unwilling to buy the U.S. dollar, regardless of economic data, as Donald Trump continues to impose new tariffs, which will eventually weigh on U.S. economic growth and the global economy.

On Wednesday, the fundamental backdrop did not support the U.S. dollar, despite solid reasons for bearish sentiment. Today, the UK released the unemployment rate (4.4%, unchanged), jobless claims (44.2K vs. 7.9K expected), and wage growth (5.8% vs. 5.9% forecast). The jobless claims report was the most significant, as it greatly exceeded expectations, putting early pressure on the pound. However, I believe that pressure should have emerged even earlier. In a few hours, the MPC meeting results will be announced, where the key factors will be Andrew Bailey's speech and the rate vote outcome. A slightly more dovish tone from Bailey or a more dovish voting result could push the pound lower, a decline that has already been looming for some time.

On the 4-hour chart, the pair is still in an uptrend. A significant decline in the pound is unlikely unless the price closes below the ascending channel. The CCI indicator has formed another bearish divergence, which, like the previous one, has not yet impacted bullish positions. A rejection from the 1.2994 level would suggest a potential drop towards the 50.0% Fibonacci retracement level at 1.2861.

Commitments of Traders (COT) Repor

The "Non-commercial" trader category has turned more bullish over the last reporting week. The number of long positions held by speculators increased by 12,920, while short positions rose by just 2,301. Bears have lost their market advantage, with the gap between long and short positions now at nearly 30,000 in favor of bulls (95K vs. 66K).

In my view, the pound still has room to decline, but recent developments could shift the market's long-term direction. Over the last three months, the number of long positions decreased from 98K to 94K, while short positions dropped from 78K to 66K. However, the key detail is that over the past six weeks, long positions surged from 59K to 95K, while short contracts fell from 81K to 66K. This period coincides with Trump's six weeks of policies.

Economic Calendar for the U.S. and the U.K.:

United Kingdom:

• Unemployment rate (07:00 UTC)
• Jobless claims change (07:00 UTC)
• Average hourly earnings change (07:00 UTC)
• Bank of England interest rate decision (12:00 UTC)
• MPC rate vote (12:00 UTC)
• BoE Governor Andrew Bailey speech (12:30 UTC)

United States:

• Initial jobless claims (12:30 UTC)
• Philadelphia Fed Business Outlook Index (12:30 UTC)
• Existing home sales (14:00 UTC)

Thursday's economic calendar is packed with major releases, particularly from the UK, which could significantly impact market sentiment.

GBP/USD Forecast and Trading Advice:

Sell positions are possible on a rebound from the 1.3003 level on the hourly chart, targeting 1.2931 and 1.2865. Buy positions are possible if the pair closes above 1.3003 on the hourly chart, with a target of 1.3151.

Fibonacci retracement levels are built from 1.2809 to 1.2100 on the hourly chart and from 1.2299 to 1.3432 on the 4-hour chart.