GBP/USD also started a new downward movement on Thursday. However, while it was logical for the euro to fall, the British pound follows its own rules. The euro is clearly following a downward trend, so each rise is considered a correction until the pair breaks a trend. Since the trend is not broken, each rise should be viewed as an opportunity to sell and prepare for a new fall. So far, everything is happening according to this scenario.

But with the British pound, things are much more complicated. It is difficult to identify any clear trend on the 24-hour timeframe; GBP/USD shows random movements, and the market doesn't take the macroeconomic and fundamental background into account. We also believe that market makers or even the Bank of England could be behind the British currency's movements, preventing it from falling through currency interventions. On Wednesday, the U.S. inflation report did not show such a significant value for market participants to quickly get rid of the dollar. Inflation slowed by only 0.1% year-on-year. In the evening, Federal Reserve Chair Jerome Powell confirmed that inflation remains too high, and members of the monetary committee indicated through the "dot-plot" chart that they now expect a maximum of 1-2 key rate cuts. At the beginning of the year, in general, the expectation was for 5-6 rate cuts, closer to the start of summer it was 3. Now it is down to 1-2 rate cuts. If this isn't a reason to buy the dollar, then what is?

Therefore, we insist that the pound often shows illogical movements, or there is an unknown supporter that prevents the British currency from declining. As we can see, consolidations below the moving average line on the 4-hour timeframe have no effect. The uptrend persists. It is quite difficult to understand what is happening on the daily timeframe. The British pound is not an appealing currency to trade.

What should we do with all this information? One of the best options is to wait until the pair starts to move in a logical and consistent manner. We have already mentioned that buying the pair when the Fed maintains a hawkish stance, Nonfarm Payrolls show strong results, and inflation seems to be decreasing more in appearance than in reality, is quite inconvenient and also psychologically challenging. If someone trades purely on technical analysis, they can buy each time the price is above the moving average. However, we believe that all types of analysis should be considered, not just one.

Also, take note of the Murray level at 1.2695, which has repeatedly prevented the price from falling below it. It acts as a strong support for the price, and breaking it could pave the way for the pound to fall. The CCI indicator has already formed three or four bearish divergences, as each subsequent peak of the indicator is lower than the previous one, while each subsequent peak of the price is higher than the previous one. Practically all the factors suggest that the pound should fall while the dollar must rise.

The average volatility of GBP/USD over the last five trading days is 79 pips. This is considered an average value for the pair. Today, we expect GBP/USD to move within the range bounded by the levels of 1.2663 and 1.2821. The higher linear regression channel is pointing upwards, suggesting an uptrend. The CCI indicator entered the oversold area three times in the month before last, and the British currency started a new phase of growth. However, this correction should have ended a long time ago.

Nearest support levels:

S1 - 1.2726

S2 - 1.2695

S3 - 1.2665

Nearest resistance levels:

R1 - 1.2756

R2 - 1.2787

R3 - 1.2817

Trading Recommendations:

The GBP/USD pair once again consolidated above the moving average line so the uptrend remains intact. The pound had no grounds to exhibit such a strong growth on Wednesday, but as usual, the market solved the problem in the simplest way possible - by buying the British currency. Inflation in the U.S. fell by only 0.1%. This doesn't imply that the dollar should fall as hard. As of the moment, the greenback's subsequent growth cannot completely rectify the situation. And even if the price consolidates below the moving average, this doesn't guarantee the start of a new downtrend. Although logically speaking, the pound can't grow forever either.

Explanation of Illustrations:

• Linear Regression Channels – Helps determine the current trend. If both are directed in the same direction, it means the trend is currently strong.
• Moving Average Line (settings 20.0, smoothed) – Determines the short-term trend and the direction in which trading should currently be conducted.
• Murray Levels – Target levels for movements and corrections.
• Volatility Levels (red lines) – The probable price channel in which the pair will spend the next day, based on current volatility indicators.
• CCI Indicator – Its entry into the oversold area (below -250) or the overbought area (above +250) means that a trend reversal in the opposite direction is imminent.