The GBP/USD currency pair also traded quite calmly on Tuesday, despite a relatively strong macroeconomic background. In the morning, reports on unemployment, the number of jobless individuals, and wages were published in the UK. Naturally, the most important report was the first, which showed a disappointing figure that sent the pound down by... 40 pips. Moreover, the British currency regained those 40 pips even before the start of the American trading session.

As we warned, the unemployment rate is not such an important report to expect a "flight of the pound." An increase in unemployment to 5% (which exceeds pessimistic forecasts) is indeed negative and raises the likelihood of a rate cut by the Bank of England at the next meeting. However, the market is currently operating under a different logic for the formation of movement. Recall that the GBP/USD pair lost about 700 pips over the past month and a half (which is quite a lot) without any solid reasons for doing so. The market was selling the pair on any event or report. If the UK Treasury Secretary, Rachel Reeves, had spoken about cats and dogs during her last address instead of the nation's budget for the next year and tax increases, the pound sterling would have fallen in that case as well. Regarding the dollar, during the entire month of October, Trump imposed new tariffs, raised old ones, conflicted with China, and the Federal Reserve conducted its second monetary policy easing in a row and is now preparing for a third. Thus, there were no grounds for such a strong decline of the pair.

And what now? Now we must wait for the inflation report (in the UK), but even if it shows a slowdown for October, we would not expect a significant fall in the pound. The dollar has squeezed the maximum out of its growth potential, and the market has accounted for absolutely all factors, even those it invented itself. Thus, we believe the upward movement, which was initiated with great difficulty last week, will continue, regardless of the UK inflation report or the Bank of England's next meeting.

We want to remind you that illogical movements in the currency market are not uncommon. We are not calling for an abandonment of any short positions. If there is a good sell signal, why not take advantage of it? Even if the pound only continues to rise, that does not mean it cannot fall within a single trading day. We only state that, from our perspective, the fundamental background remains sharply in favor of the British pound, even if no positive news is coming from the UK itself. Thus, specifically regarding trading, if there are buy signals, we would fully act on them. If sell signals are formed, it is better to work with a half lot. Over the past few months, the CCI indicator has entered the oversold area five times and is simply tired of forming bullish divergences. All this is a signal of an impending rise.

The average volatility of the GBP/USD pair over the last five trading days is 69 pips. For the pound/dollar pair, this value is considered "average." Therefore, on November 12, we expect movements within the range limited by levels of 1.3105 and 1.3243. The upper channel of the linear regression is directed downwards, but due to a technical correction on higher timeframes. The CCI indicator has entered the oversold area four times, warning of a resumption of the upward trend. A new bullish divergence has formed, from which the last phase of growth began.

Nearest Support Levels:

S1 – 1.3062

S2 – 1.2939

S3 – 1.2817

Nearest Resistance Levels:

R1 – 1.3184

R2 – 1.3306

R3 – 1.3428

Trading Recommendations:

The GBP/USD currency pair is attempting to resume the upward trend of 2025, and its long-term prospects remain unchanged. Donald Trump's policies will continue to exert pressure on the dollar, so we do not expect the American currency to appreciate. Therefore, long positions with targets at 1.3243 and 1.3306 remain relevant for the near term while the price remains above the moving average. If the price is below the moving average line, small short positions can be considered with targets of 1.3062 and 1.2939 on technical grounds. Occasionally, the American currency shows corrections (in the global sense), but for a trend to strengthen, it needs real signs of the end of the trade war or other global positive factors.

Explanations for Illustrations:

• Linear regression channels help determine the current trend. If both are directed in the same way, it indicates that the trend is currently strong.
• The moving average line (settings 20,0, smoothed) defines the short-term trend and the direction in which trading should currently be conducted.
• Murray levels are target levels for movements and corrections.
• Volatility levels (red lines) represent the likely price channel in which the pair will spend the following days, based on current volatility indicators.
• The CCI indicator entering the oversold territory (below -250) or overbought territory (above +250) indicates that a trend reversal in the opposite direction is approaching.