Hello, dear traders! On the H1 chart, GBP/USD went down on Friday, following the release of US labor market data, but then quickly recovered and settled above 1.2238. The quote may now get back to 1.2238. Meanwhile, in case of a rebound from this mark, the price may rise to 1.2432. At the same time, the pair may fall to the 127.2% Fibonacci level of 1.2111 if it consolidates below 1.2238.

Bullish sentiment may now slightly decrease following several weeks of constant selling pressure. At the beginning of the trading week, the pair is seen to continue trading in the downtrend. In addition, it is important to remember the ascending trend corridor on the H4 chart. It is still limiting the quote's downside potential.

The services PMI and the composite PMI in the United Kingdom came in at 48.8 and 48.2 in November respectively. However, there was another contributing factor to the fall in GBP on Monday. It seemed to be a correction after a surge on Friday. By the way, following the release of strong macro results in the US, the bulls' behavior was rather strange. The greenback swelled after their release but fell afterward.

Today, business activity data will be published in the United States as well. However, a correction is likely despite the results.

Commitments of Traders:

Bearish sentiment decreased last week. Speculators closed 5,037 long positions and 3,999 short ones. Overall, sentiment is still bearish, with the number of shorts exceeding that of longs. Traders mostly continue selling the pair although bullish sentiment has started to grow in recent months. Nevertheless, it is a long and slow process. It has lasted for several months now, but the number of shorts still twice exceeds that of longs. Growth may extend as technical analysis of the ascending corridor on the H4 chart shows. Still, there may arise factors that may affect the greenback. Anyway, we may now see the long-awaited increase but it is hard to define with the help of COT reports.

Macroeconomic calendar:

United Kingdom – Services PMI (11-30 UTC); Composite PMI (11-30 UTC).

United States – Services PMI (16-45 UTC); Composite PMI (16-45 UTC); ISM Services PMI (17-00 UTC).

On Monday, the macroeconomic calendar contains only business activity data for the US and the UK.

Outlook for GBP/USD:

It will become possible to open short positions after the quote closes below 1.2238 on the H1 chart. The targets are seen at 1.2111 and 1.2007. Meanwhile, long positions should not be considered as a fall in price seems more likely.