On the hourly chart, the GBP/USD pair on Wednesday once again rebounded from the resistance level of 1.3513–1.3539, while the bears again failed to push the pair downward. The probability of a decline toward the support level of 1.3428–1.3437 remains. A consolidation of quotes above the 1.3513–1.3539 level would allow for a return of the pound to the 61.8% retracement level at 1.3596.

The wave situation remains "bullish." The last completed upward wave broke the previous peak, while the new downward wave did not break the previous low. Geopolitics gave the bears an almost complete advantage in the market for two months, then for two weeks the geopolitical backdrop supported the bulls. At present, the situation in the Middle East is contradictory, so traders are in a pause mode. To break the "bullish" trend, two downward waves or a break below the April 6 low are required.

The news background on Wednesday was quite interesting, but traders continue to remain calm and are not rushing into action. Yesterday it became known that the main inflation indicator in the UK rose only to 3.3% year-on-year in March. On the one hand, traders expected exactly this figure; on the other hand, inflation could have accelerated much more strongly. If the consumer price index had risen to 3.5% or higher, the Bank of England might already have decided at its next meeting to tighten monetary policy, since in that case inflation would exceed the target level by almost twice. However, inflation rose only slightly, while core inflation actually declined. Therefore, at the next MPC meeting, a decision to keep monetary policy parameters unchanged is likely. A day earlier, the UK unemployment rate was released, showing a decline from 5.2% to 4.9%. Again, it could have been much worse. No one expected such a sharp drop in unemployment, but this week traders still do not intend to pay attention to the economic background. The pound is standing still.

On the 4-hour chart, the pair consolidated above the downward trend channel, which allows us to expect a full-fledged trend. After a "bearish" divergence formed on the CCI indicator, the pair reversed in favor of the US dollar and consolidated below the 38.2% retracement level at 1.3540. However, the quotes then got stuck between the levels of 1.3482 and 1.3540. The graphical picture on the hourly chart is currently clearer, so it is advisable to rely on it. No new 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 7,603, while short positions rose by 5,973. The gap between long and short positions is now effectively as follows: 55,000 versus 110,000. For six consecutive weeks, non-commercial traders actively increased selling and reduced buying, which led to a strong imbalance between long and short positions. In recent weeks, bears have dominated, which raises no questions 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 bank 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 away, and the war could resume at any moment. In that case, the bears' advantage could become even stronger.

News calendar for the US and the UK:

• UK – Manufacturing PMI (08:30 UTC).
• UK – Services PMI (08:30 UTC).
• US – Initial jobless claims (12:30 UTC).
• US – Manufacturing PMI (13:45 UTC).
• US – Services PMI (13:45 UTC).

On April 23, the economic calendar contains five entries which, unfortunately, may also be ignored, just like all the reports this week. The impact of the news background on market sentiment on Thursday may again be extremely weak.

GBP/USD forecast and trading tips:

Selling the pair is possible today if there is a rebound on the hourly chart from the 1.3513–1.3539 level, with a target of 1.3428–1.3437. Buying is possible if there is a consolidation above the 1.3513–1.3539 level, with a target of 1.3596–1.3620.

Fibonacci levels are built from 1.3866 to 1.3158 on the hourly chart and from 1.3012 to 1.3868 on the 4-hour chart.