On the hourly chart, GBP/USD consolidated below the 23.6% retracement level at 1.3263 on Thursday, allowing traders to anticipate a further decline toward the 1.3136–1.3177 support level. A rebound from this zone would favor the pound and could lead to a modest recovery toward 1.3263. Consolidation above 1.3263 would also point to a potential further advance.

The market outlook has turned bearish. The last completed upward wave failed to break above the previous peak, while the new downward wave easily broke below the previous low. Thus, the bears have temporarily taken control of the market. The market has already priced in further FOMC monetary policy tightening in the near term, while the Bank of England is only beginning to tighten its policy. The pound is expected to resume its upward movement once the corrective pullback is complete.

The fundamental backdrop on Thursday offered the bulls an opportunity to launch a counterattack, but they failed to take advantage of it. UK GDP reports showed respectable figures, although forecasts were relatively high this time. The annual figure was particularly strong, reaching +1.9%. Industrial production also performed well, rising by 0.3% instead of declining by 0.3%. However, the bulls ignored all this data, as US inflation reports are currently more important to the market. Another such report is due today: the US Producer Price Index (PPI). If it also comes in at least 0.1 percentage points above traders' expectations, the bears could continue their attacks. The October PPI is expected to reach 0.4%, considerably lower than the previous month's figure of 1.3%. However, the annual rate could rise from 6.3% to 6.6%, which can hardly be considered a positive development. Therefore, any increase in PPI could potentially support further US dollar appreciation.

On the 4-hour chart, GBP/USD declined to the 23.6% retracement level at 1.3265 and consolidated below it. Thus, the decline could continue toward the 0.0% retracement level at 1.3137. A bullish divergence is developing on the CCI indicator, which could bring the pair's decline to a halt. However, this divergence has been developing for several days, while the bears continue to demonstrate their strength.

Commitments of Traders (COT) Report:

The sentiment of the "Non-commercial" trader category became less bearish over the latest reporting week. The number of Long positions held by speculators increased by 7,135, while the number of Short positions decreased by 12,458. The gap between Long and Short positions currently stands at approximately 64,000 versus 124,000. The bears retain a substantial advantage, which has been widening over time. Previously, the bears' dominance was unquestionable, but it is now being called into question because the fundamental backdrop has changed in recent months.

The bearish trend in the pound is still not considered convincing. However, in the near term, everything will depend on Trump's trade policy, the monetary policies of the Federal Reserve and the Bank of England, as well as the duration, scale, and consequences of the war in the Middle East. In recent months, the market has shifted its focus toward peace, but negotiations between Iran and the United States remain extremely difficult. Whether Washington and Tehran will ultimately reach an agreement remains an open question. Any deterioration in the geopolitical situation could once again increase demand for the US dollar.

Economic Calendar for the United States and the United Kingdom:

• United States – Producer Price Index (13:30 UTC).

On November 13, the economic calendar contains just one event, which could easily trigger another round of bearish activity. Economic data could influence market sentiment on Friday during the second half of the day.

GBP/USD Forecast and Trading Tips:

Short positions could have been opened following a rebound from the 1.3454–1.3469 level on the hourly chart, with targets at 1.3404 and 1.3342. Both targets were reached. New short positions could be considered following a close below 1.3342, with a target of 1.3263. This target was also reached. Yesterday, short positions in the pound could have been opened following a close below 1.3263, with a target of 1.3177. These positions can remain open today. Long positions could be considered following a rebound from the 1.3136–1.3177 level, with a target of 1.3263.

The Fibonacci retracement levels are drawn from 1.3674 to 1.3136 on the hourly chart and from 1.3674 to 1.3137 on the 4-hour chart.