On the hourly chart, the GBP/USD pair on Tuesday surged towards the resistance zone of 1.2488 – 1.2508. A rebound from this zone would favor the U.S. dollar and trigger a decline towards the support zone of 1.2363 – 1.2370. However, a firm consolidation above 1.2488 – 1.2508 would increase the likelihood of continued growth towards the 100.0% corrective level at 1.2569.

The wave structure is completely clear. The last completed upward wave broke the previous wave's peak, while the last completed downward wave did not breach the previous low. Therefore, it can be considered that a bullish trend is still forming. However, the recent waves are very small and can be interpreted in different ways. I am not confident that we are dealing with a bullish trend that will last for at least a couple more weeks. The resistance zone of 1.2488 – 1.2508 might halt the bulls' crusade.

The fundamental backdrop on Tuesday was relatively weak. The only report of the day, the JOLTS job openings from the U.S., allowed bullish traders to continue their attacks. However, with a new day, the pound needs new catalysts to continue its rise.

Today, both the UK and the U.S. will release services PMI reports, which could equally favor both bulls and bears. Therefore, providing a full-day forecast early in the day would be inappropriate. The U.S. ADP employment report will also be released today, followed by the Bank of England meeting tomorrow. Bullish traders could easily retreat if unfavorable data emerges. The bullish trend doesn't appear solid.

I recommend keeping a close eye on the 1.2488 – 1.2508 zone, as it is a very strong resistance. If the Bank of England cuts rates tomorrow and signals readiness to continue easing monetary policy into 2025, a decline could start precisely from this zone.

On the 4-hour chart, the pair has consolidated above 1.2432 and the upper line of the downward trend channel. Thus, the growth process might continue for some time towards the next 76.4% corrective level at 1.2565. However, on the hourly chart, there is a strong resistance zone, and the bulls will need significant effort to break through. No emerging divergences are observed on any indicators today.

Commitments of Traders (COT) Report:

The non-commercial trader sentiment became even more bearish over the last reporting week. The number of long positions held by speculators decreased by 16,365, while short positions fell by 2,950. The bulls have completely lost their advantage in the market, a process that has unfolded over several months. The gap between long and short positions is now in favor of the bears: 59,000 vs. 81,000.

In my opinion, the pound still has downward potential, and the COT reports signal a strengthening of bearish positions almost every week. Over the last three months, the number of long positions has decreased from 161,000 to 59,000, while short positions have increased from 67,000 to 81,000. I believe that over time, professional players will continue to offload long positions or increase short positions, as all possible factors supporting the British pound have already been exhausted. Chart analysis currently signals growth, but corrections are also to be expected.

News Calendar for the U.S. and the UK:

• UK – Services PMI (09:30 UTC)
• U.S. – ADP Employment Change (13:15 UTC)
• U.S. – Services PMI (14:45 UTC)
• U.S. – ISM Services PMI (15:00 UTC)

On Wednesday, the economic calendar includes several entries of medium significance. The impact of the news on trader sentiment is expected to be moderate throughout the day.

GBP/USD Forecast and Trader Recommendations:

Selling the pair is possible today after a rebound from the 1.2488 – 1.2508 zone, with a target of 1.2363 – 1.2370 on the hourly chart. A close above 1.2488 – 1.2508 will allow for buying with a target of 1.2569.

The Fibonacci retracement levels are built from 1.3000 – 1.3432 on the hourly chart and from 1.2299 – 1.3432 on the 4-hour chart.