After a strong performance yesterday, the pound has lost ground today. GBP/USD moved lower throughout the first half of the day, falling to 1.3306, its lowest level in the past 24 hours. Yesterday, the British currency outperformed its peers because the Confederation of British Industry's retail sales survey came in significantly better than expected, at -10 versus a forecast of -47 and -55 the previous month. However, no UK data capable of supporting the pound was released today.

This morning, the BRC Retail Price Index for October was released at 2.1%, above the forecast of 1.6% and the previous month's 1.4%. This is a relatively strong reading and further supports the case for a Bank of England rate hike on November 5. However, this is precisely why the pound did not react to the data: this scenario has long been priced into the market. When a currency lacks its own catalysts, it becomes dependent on its counterpart in the pair. The US dollar is currently in demand ahead of the Fed meeting.

The Fed meeting chaired by Kevin Warsh is fast approaching. While the market expects rates to remain unchanged, attention is focused on how hawkish the central bank's tone will be. As long as the Fed meeting remains ahead and the pound lacks fresh upside catalysts, GBP/USD is likely to remain under pressure, with any rebounds facing strong selling pressure.

The US economic calendar will finally pick up today, and the data could determine whether the dollar continues to weigh on the pound. Durable Goods Orders for September will be released, covering equipment and machinery with a service life of more than three years. These figures indicate whether businesses are willing to invest in expansion. Orders are expected to rise by 0.6% after falling by 0.1%, while orders excluding transportation are also forecast to increase by 0.6%, following a previous gain of 0.2%.

Next, the Conference Board Consumer Confidence Index for October will be released. This survey covers approximately 5,000 households and assesses their views on income and labor market conditions. The forecast is 80.5, compared with 81.9 previously and 89.4 in August, indicating an established downward trend.

New Home Sales for September will follow, with a forecast of 649,000, down from 684,000. This indicator is sensitive to mortgage rates and shows how high borrowing costs affect the housing market. The final release will be the Richmond Fed Manufacturing Index for October, forecast at 1 compared with -2 previously. This survey measures sentiment among local manufacturers.

Strong data would provide additional support for the dollar and increase pressure on the pound. Weak consumer confidence and housing figures, however, could give GBP/USD a brief respite. For the pound, this presents both an opportunity and a risk, as any rebound unsupported by fresh data is unlikely to last.

Momentum

GBP/USD is currently trading at 1.3317. The breakout level at 1.3330 lies 13 points above the current price. If the pair consolidates above this level, it could advance to 1.3361 and then to 1.3390.

An important detail should be noted: 1.3330 was a major support level as recently as yesterday, but today's decline has turned it into resistance. Breaking through a level that previously supported the price but has now become a ceiling is not easy. Therefore, a move above this level is unlikely without weak US data.

On the other hand, support is located at 1.3299. A break below this level, followed by consolidation beneath it, could push the pair toward 1.3267 and 1.3233. This is the primary scenario, as the overall market backdrop is weighing on the pound. Today's low of 1.3306 is also very close to the current price, leaving only about 18 pips between the current level and that low.

Beginner traders should remember that the first test of a level does not, by itself, constitute a confirmed breakout.

Mean Reversion

For GBP/USD, the upper reference level of 1.3330 coincides with the breakout level for a potential buy trade. This requires particular caution from beginner traders because the same price level can produce two opposite scenarios.

If the pair reaches 1.3330 and consolidates firmly above it, this constitutes a breakout, and selling should be avoided. If the price briefly moves above the level, fails to hold there, and quickly falls back below it, a failed breakout may offer a selling opportunity. In that case, a stop-loss can be placed above the highest point reached during the failed attempt.

These two scenarios cannot be distinguished on the first test alone. Therefore, it would be preferable to avoid trading the initial reaction in this zone and wait for a clearer signal.

The lower reference level of 1.3307 is close to today's low of 1.3306 and lies eight points above the breakout level at 1.3299. Here, potential buying opportunities may arise if the price briefly falls below 1.3307, fails to extend the decline, and returns above the level.

The stop-loss should be placed below the low of the failed move, but no lower than 1.3299. If the price breaks below that level as well, the recovery scenario is invalidated, and the downside scenario takes precedence.

The overall market backdrop remains unfavorable for the pound. Therefore, any upward rebound is expected to be limited, while a continuation of the decline remains the more likely scenario.