Hi everyone! On the 1H chart, the GBP/USD pair rose to the level of 1.2315 today. However, closer to the middle of the day, it fell to the correction level of 523.6% - 1.2146. A rebound from this level will help the pound sterling resume an upward movement. It may reach 1.2315. If the pair drops below 1.2146, the likelihood of a decline to the lower border of the ascending channel will increase. Yet, the sentiment will remain bullish. The economic calendar for the UK is empty today. There will be no economic reports from the US as well. If there are some, traders are likely to ignore them. The crucial report on the second-quarter GDP was released yesterday. It showed a second consecutive negative figure of economic growth. Despite the fact that the euro grew slightly following this report, the pound sterling, on the contrary, asserted strength.

The pound sterling has been rising in recent weeks. As long as it is moving in the upward channel, it is unlikely to decline. However, the situation may change drastically next week. The BoE meeting will be the last in the series of central banks' meetings. Almost all analysts are confident that the BoE will raise the key rate. The question is how traders could react to the rate hike. This week, the Fed also hiked the benchmark rate by 75 basis points. However, the US dollar was unable to take advantage of this rate increase. It does not mean that the pound sterling will definitely drop next week but this scenario looks possible. It is better to closely monitor the price movement in the upward channel. When traders stop buying the pound sterling, there will be price fluctuations in it. In my opinion, the pound sterling still could resume a decline.

On the 4H chart, the pair rose to the downtrend line. It touched the correction level of 127.2% - 1.2250. A rebound from these levels will lead to a fall to the level of 1.1980. I circled the breakout level with a green rectangle as there was no clear rebound either from the trend line or from the correction level. In case of consolidation above 1.2250, the pair is highly likely to advance to new highs. There are no divergences in technical indicators today.

Commitments of Traders (COT):

The mood of the "Non-commercial" category of traders has become a little less bearish over the past week. The number of Long-contracts decreased by 1,907, while the number of Short ones tumbled by 3,746. Thus, the sentiment of the retail traders remained bearish. The number of Short contracts still exceeds the number of Long ones by several times. Large investors continue to get rid of the pound sterling. So, their sentiment has not changed. This is why the British currency could resume a downward movement over the next few weeks. There is also a likelihood of further growth. However, traders are more interested in a new trend, not a two-or three-day rise replaced by a sharp decline.

Economic calendar for UK and US

US- Household Expenditures (12:30 UTC).

US - University of Michigan Consumer Sentiment Index (14:00 UTC).

On Friday, the economic calendar for the UK is empty again. The US will publish several reports. However, traders are likely to pay zero attention to them. Today, fundamental factors will have only a moderate impact on the market sentiment.

Outlook for GBP/USD and trading recommendations:

It is better to open short positions if the price slides below the ascending channel on the 1H chart with the prospects of a further drop to the target levels of 1.1933 and 1.1684. If the pair rebounds from the 1.1933 level on the 1H chart, aiming at 1.2146, traders could go long. The price has already broken above this level. It is recommended to open new long positions after a rebound from 1.2146 to the target level of 1.2315.