GBP/USD. Two Upside Scenarios Today!

During Thursday's Asian session, the GBP/USD pair consolidated, oscillating in a narrow range and maintaining spot prices above the 1.2400 level, influenced by the dynamics of the US Dollar (USD). The USD Index (DXY), which tracks the USD against a basket of currencies, struggled to capitalize on the modest recovery from the lowest level since September 1 due to dovish expectations from the Federal Reserve (Fed). Bets increased following the softer US CPI report released on Tuesday, indicating consumer inflation was cooling faster than expected. Moreover, markets are now pricing in a higher probability that the Fed will begin cutting rates in the first half of 2024, keeping US Treasury bond yields low and acting as a headwind for the dollar. However, upside prospects are limited by the growing acceptance that the Bank of England (BoE) may soon start cutting interest rates. The UK Consumer Price Index (CPI) on an annual basis dropped significantly from 6.7% to 4.6% in October, hitting a two-year low. Additionally, Core CPI declined from 6.1% in September to 5.7%. In this mixed fundamental context, aggressive traders should exercise caution before establishing a firm direction in the short term, especially in the absence of relevant macroeconomic data from the UK on Thursday. Meanwhile, the US economic calendar features the usual Weekly Initial Jobless Claims, Philly Fed Manufacturing Index, and Industrial Production figures. These, along with US bond yields and overall risk sentiment, could influence USD price dynamics and offer short-term opportunities in the GBP/USD pair. I have also identified two possible price scenarios: the first anticipates an upward price movement during the London session as we are in an Order Block at the 1.24 level, and the price could retest the supply zone at 1.249. The second scenario suggests a decline to the 0.5% Fibonacci level calculated from the low of 1.207 to the high of 1.251. If it retraces to this Fibonacci level and tests the bullish trendline again, the price could push higher. Comment and leave a like; greetings from Nicola, the CEO of Forex48 Trading Academy.