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14.11.202415:32 Forex Analysis & Reviews: GBP/USD. November 14th. Can the Pound Rely on Powell?

On the hourly chart, the GBP/USD pair consolidated below the 1.2709–1.2734 support zone on Wednesday. It continued declining on Thursday, heading toward the next support zone at 1.2611–1.2620. A rebound from this zone might lead to a slight recovery for the pound. However, taking long positions is not advisable under the current conditions. The pound appears to be caught in a significant trend driven by order flow.

Exchange Rates 14.11.2024 analysis

The wave pattern indicates a continuation of the bearish trend. The most recent upward wave failed to break the previous peak, while the last downward wave broke two recent lows. To signal a reversal, the pair would need to return to the 1.3000 level and achieve a close above its most recent peak.

On Wednesday, the US inflation report had a neutral impact, but bearish traders maintained their selling pressure. This morning, weak Eurozone industrial production data accelerated the euro's decline, which also weighed on the pound. Later today, Fed Chair Jerome Powell is scheduled to speak, and the pound's movement may depend on his remarks. Powell is likely to reinforce the dollar's strength, particularly given his recent comments suggesting that rates might remain unchanged in December. With inflation now at 2.6%, this scenario appears increasingly likely.

Exchange Rates 14.11.2024 analysis

On the 4-hour chart, the pair consolidated below the 61.8% Fibonacci level at 1.2728, suggesting further declines toward 1.2620. A break below 1.2620 could increase the likelihood of further declines toward the 76.4% Fibonacci retracement at 1.2565. Bullish divergences currently have minimal influence on trader sentiment.

Commitments of Traders (COT) Report

Exchange Rates 14.11.2024 analysis

The sentiment among Non-commercial traders remains predominantly bullish, although it has weakened slightly. Long positions decreased by 11,899 contracts, while short positions increased by 9,373 positions. Bulls still maintain an advantage, with 121,000 long positions compared to 76,000 short positions. However, the strengthening bearish trend suggests that professional traders may continue reducing long positions or increasing shorts, as bullish factors for the pound appear to be priced in.

Key Events for the US and UK

  • US Producer Price Index (13:30 UTC)
  • US Initial Jobless Claims (13:30 UTC)
  • Speech by Fed Chair Jerome Powell (20:00 UTC)

Powell's remarks this evening could significantly influence market sentiment.

GBP/USD Forecast and Trading Recommendations

Short positions remain valid, particularly following a rebound from 1.3044 with targets at 1.2931, 1.2892, 1.2788–1.2801, and 1.2752, all of which have been achieved. The next targets are 1.2611–1.2620 and 1.2570. Long positions are not recommended in the current bearish trend.

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

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

Samir Klishi,
Analytical expert of InstaSpot
© 2007-2024
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