On the hourly chart, the GBP/USD pair on Thursday consolidated below the 127.2% retracement level at 1.3258, which suggests a potential continuation of the decline toward the support zone at 1.3114–1.3139. A rebound from the 1.3114–1.3139 zone or a breakout above 1.3259 would favor the pound and a possible rise toward the resistance zone at 1.3357–1.3371.

The wave structure recently shifted in favor of the bulls but quickly reversed again. At this point, the last upward wave broke the peaks of the two previous waves, but the latest downward wave also breached all prior lows. As a result, the trend can again be considered "bearish." However, the information background played a significant role in supporting the bears. If the news flow turns against them in the near term, we may see an equally strong upward wave, potentially shifting the trend back to "bullish." The situation remains ambiguous and largely depends on upcoming news.

The news background on Thursday was weak, yet bears managed to press forward. Economic data has been the key to their recent success. However, news can be inconsistent and misleading. Just because the GDP or ADP report came in strong doesn't guarantee that the Nonfarm Payrolls or unemployment data will also be strong. Therefore, the situation could change quickly for the bears. After all, they had remained in the shadows for nearly six months. That said, I wouldn't rush to praise the dollar or expect a swift recovery to the year's opening levels. The Nonfarm Payrolls forecast is low—just 110,000. The unemployment rate is expected to rise to 4.2%. The ISM Manufacturing PMI forecast is also weak, below 50.0. As such, bulls may attempt a counterattack today. One day won't be enough to change the trend to bullish, but every trend shift starts somewhere.

On the 4-hour chart, the pair made a new reversal in favor of the U.S. dollar and is overall continuing its downward movement. A consolidation below the support zone at 1.3378–1.3435 allows traders to anticipate a move toward the next Fibonacci retracement level of 76.4% at 1.3118. Currently, no emerging divergences are observed on any indicator. A rebound from 1.3118 could trigger a reversal in favor of the pound and lead to some upward correction.

Commitments of Traders (COT) Report:

Trader sentiment in the "Non-commercial" category became significantly less bullish over the past reporting week. The number of long positions held by speculators declined by 7,220, while short positions increased by 21,401. Bears made a sharp comeback, likely due to the rising appeal of the U.S. dollar amid the signing of important trade agreements by Washington. The gap between long and short positions is now nearly nonexistent: 93,000 vs. 93,000.

In my view, the pound still has downward potential. The news background in the first half of the year was grim for the dollar, but it is slowly turning more favorable. Trade tensions are easing, key deals are being signed, and the U.S. economy is expected to rebound in Q2, supported by tariffs and various domestic investments.

Economic calendar for the U.S. and the UK:

• U.S. – Change in Nonfarm Payrolls (12:30 UTC)
• U.S. – Unemployment Rate (12:30 UTC)
• U.S. – Average Hourly Earnings (12:30 UTC)
• U.S. – ISM Manufacturing PMI (14:00 UTC)

Friday's economic calendar includes four major events. The impact of the news background on trader sentiment in the second half of the day will be significant.

GBP/USD Forecast and Trading Tips:

Selling the pair was possible after a close below 1.3425 on the hourly chart and then after a close below the 1.3378–1.3435 support zone on the 4-hour chart. The target of 1.3258 was reached and broken. Selling can be continued with a target of 1.3114–1.3139. For buying opportunities today, look for a rebound from the 1.3114–1.3139 zone or a close above 1.3258.

The Fibonacci level grids are constructed from 1.3371–1.3787 on the hourly chart and from 1.3431–1.2104 on the 4-hour chart.