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11.11.202416:52 Forex Analysis & Reviews: GBP/USD: November 11. The Pound Remains in a Sideways Trend

On the hourly chart, the GBP/USD pair began a new downward movement on Friday, targeting recent support levels. The pair may soon drop to 1.2850. Other levels are being ignored as the price has been moving sideways for several weeks.

Exchange Rates 11.11.2024 analysis

The wave structure is clear. The last completed upward wave failed to break the peak of the previous wave, while the recent downward wave broke its low by a few points. This indicates that a bearish trend is forming.

The recent waves are nearly identical in size, signaling a sideways trend. However, the progressively lower price lows suggest sustained bearish sentiment and a likely further decline in the pound.

On Friday, the U.S. dollar strengthened modestly, supported by the University of Michigan Consumer Sentiment Index. However, even without this report, the dollar likely would have gained due to the pound's bearish global trend.

Previously, the market had priced in U.S. recession fears and monetary policy easing expectations. Now, traders are focusing on the ECB and Bank of England, closely examining any negative developments in the EU or UK.

Additionally, factors such as the Federal Reserve's less dovish stance and the potential for rising U.S. inflation provide further support for the bears. On the hourly chart, the sideways movement shifts attention to the 4-hour chart, which shows two rejections at 1.3044 and strong potential for a drop toward 1.2745.

Exchange Rates 11.11.2024 analysis

The pair has twice rebounded from the 1.3044 corrective level. After a brief increase following a bullish divergence on the CCI indicator, bearish pressure resumed. I expect the bears to eventually break the 1.2850 level, where they previously struggled, leading to further declines in the pound.

Commitments of Traders (COT) Report

Exchange Rates 11.11.2024 analysis

The sentiment among Non-commercial traders has turned slightly less bullish but remains positive overall. The number of long positions decreased by 11,899, while short positions increased by 9,373. Bulls still maintain a significant advantage, with 121,000 long positions compared to 76,000 short positions.

Despite this, the pound's downward potential persists, as even the COT report indicates strengthening bearish positions. Over the last three months, long positions have grown from 102,000 to 120,000, while short positions have risen from 55,000 to 76,000. This trend suggests professional traders may reduce long positions or increase short positions as reasons to buy the pound diminish. Technical analysis also supports further declines.

Economic Calendar

Monday's economic calendar contains no noteworthy events. Market sentiment will likely remain unaffected by external news today.

GBP/USD Forecast and Trader Advice

Selling the pair was possible after a rejection at 1.3044 on the 4-hour chart, targeting 1.2931. This target has been reached twice. Another rejection at 1.3044 or 1.3054 will provide new selling opportunities with targets at 1.2931, 1.2892, and 1.2845. Buying the pair during a bearish trend is not recommended.

Fibonacci Levels

  • Hourly Chart: Levels built between 1.2892 and 1.2298.
  • 4-Hour Chart: Levels built between 1.4248 and 1.0404.

*Analiza tržišta koja se ovde nalazi namenjena je boljem razumevanju tržišta i ne pruža instrukcije za vršenje trgovanja.

Samir Klishi,
Analytical expert of InstaSpot
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