On the hourly chart, GBP/USD resumed its upward movement on Tuesday and reached the 1.3454–1.3469 resistance level this morning. A rebound from this zone today would favor the US dollar and could trigger a decline toward 1.3404 and 1.3342. Consolidation above the 1.3454–1.3469 level would increase the likelihood of further gains toward the next resistance level at 1.3526–1.3547.

The market situation remains bullish. The latest completed downward wave failed to break below the previous low, while the new upward wave broke above the previous high. Therefore, bulls continue to control the market. The market has already priced in further FOMC monetary policy tightening in the near term, while expectations of tighter Bank of England policy are only beginning to gain traction. As a result, market attention has shifted toward the pound sterling in advance.

The news background on Tuesday allowed bullish traders to launch a cautious advance, as the September JOLTS report came in above expectations. However, the market chose not to focus on secondary data. The first results of the vote count for the new US Congress began arriving overnight, and it is already clear that the Democratic Party has won majorities in both chambers. Although the vote count has not yet been completed, Democrats have already secured 223 seats in the House of Representatives and 53 seats in the Senate. These figures are sufficient to establish a majority in both chambers. Consequently, Donald Trump will have to face opposition largely on his own over the next two years. However, the US president has brought this situation upon himself. The consequences of his policies are difficult to reconcile with concepts such as "prosperity" and "the greatest era in history." Americans' living standards have declined significantly over the past two years, prices have increased, and approximately 70% of the US population does not understand the purpose of the war with Iran. In other words, people reap what they sow.

On the 4-hour chart, GBP/USD rebounded from the 76.4% Fibonacci retracement level at 1.3277 and advanced toward the 61.8% retracement level at 1.3469. A rebound from this level would favor the US dollar and could lead to a decline toward 1.3405 and 1.3348. Consolidation above the 1.3469–1.3482 level would increase the probability of further gains toward the next Fibonacci level of 76.4% at 1.3547. No emerging divergences are currently visible on any of the indicators.

Commitments of Traders (COT) Report

The sentiment of the "Non-commercial" trader category became slightly less bearish over the latest reporting week. Speculators increased their number of Long positions by 2,417, while Short positions rose by 1,411. The gap between Long and Short positions currently stands at approximately 57,000 versus 136,000. The bears' advantage remains substantial and continues to widen over time. Previously, bearish dominance was unquestionable, but the situation has become less clear as the news background has changed over the past few months.

Confidence in a bearish trend for the British pound remains limited. However, much will depend in the near future 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 had shifted toward expectations of peace, but negotiations between Iran and the US failed before they had even properly begun. The war between the two countries could resume in full force as early as November.

Economic Calendar for the US and the UK

• United Kingdom – Services Business Activity Index (09:30 UTC).
• United States – ADP Employment Change (13:15 UTC).
• United States – ISM Services Business Activity Index (15:00 UTC).
• United States – US Congressional Election Results.

The November 4 economic calendar contains three notable releases, all from the United States. The economic news flow could have a significant impact on market sentiment on Wednesday, particularly during the second half of the day.

GBP/USD Forecast and Trading Recommendations

Selling opportunities may arise today if the pair rebounds from the 1.3454–1.3469 level on the hourly chart, with targets at 1.3404 and 1.3342. Buying opportunities were available following an hourly close above 1.3342, with targets at 1.3404 and 1.3454–1.3469. These targets have been reached. New buying opportunities may arise following an hourly close above 1.3454–1.3469, targeting 1.3526–1.3547.

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.