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29.10.2026 11:29 AM
The market remains bullish. The latest completed upward wave broke above the previous peak, while the new downward wave failed to break below the previous low. As a result, bulls have temporarily taken the initiative. The FOMC's monetary policy tightening and the hawkish outlook conveyed by Kevin Warsh supported the dollar for a month. Bulls have now taken center stage, as the Bank of England may begin a monetary policy tightening cycle next week.
The news flow was relatively limited on Wednesday. Despite the Fed meeting being an important event for the currency market, traders were already well aware of its likely outcome. Consequently, the FOMC's decision to leave monetary policy unchanged came as no surprise. However, further bearish pressure could reasonably have been expected on Wednesday evening, as two FOMC policymakers voted in favor of monetary policy tightening. This suggests that the Fed's underlying stance was slightly more hawkish than anticipated. Nevertheless, this increased hawkishness does not change the overall outlook. The Fed is expected to raise interest rates in December, and the market has been aware of this possibility for some time. The October meeting confirmed a pattern of rate hikes at every other meeting. There are no grounds for ending the tightening cycle or introducing a longer pause. Inflation in the United States continues to rise, economic growth remains strong enough to support higher interest rates, and the labor market has yet to raise serious concerns. All these factors point toward further rate increases. However, as already noted, traders were aware of this outlook even before the Fed meeting.
On the four-hour chart, GBP/USD rebounded from the 76.4% Fibonacci retracement level at 1.3277, reversed in favor of the pound, and began rising toward the 61.8% retracement level at 1.3348. A close below 1.3277 would favor the US dollar and a continuation of the decline toward the 100.0% retracement level at 1.3159. No developing divergences are visible on any of the indicators today.
Commitments of Traders (COT) Report:
The sentiment of the Non-commercial trader category became less bearish over the latest reporting week. Speculators increased their Long positions by 10,043 and reduced their Short positions by 16,501. The gap between Long and Short positions currently stands at approximately 54,000 versus 134,000, respectively. The bears' advantage has narrowed again, although it had been widening in recent weeks. Previously, bearish dominance was unquestionable, but the situation is now less clear because the fundamental backdrop has changed in recent months.
The bearish trend in the pound remains unconvincing. However, the near-term outlook will depend on Trump's trade policy, the monetary policies of the Fed and the Bank of England, and the duration, scale, and consequences of the war in the Middle East. In recent months, the market had adjusted its expectations toward peace, but negotiations between Iran and the United States collapsed before they had properly begun. The war between the two countries could resume on a full scale as early as November.
Economic Calendar for the United States and the United Kingdom:
The economic calendar for October 29 contains four releases, with the GDP report being the most notable. Economic data may influence market sentiment during the second half of Thursday's trading session.
GBP/USD Forecast and Trading Recommendations:
Selling opportunities arose following a rebound from 1.3404 on the hourly chart, with targets at 1.3342 and 1.3263. Further selling opportunities may arise following a rebound from 1.3342, with targets at 1.3263 and 1.3177. Buying opportunities may arise if the hourly chart closes above 1.3342, with a target of 1.3404.
The Fibonacci retracement levels are drawn from 1.3674 to 1.3136 on the hourly chart and from 1.3158 to 1.3655 on the four-hour chart.
