empty
 
 
You are about to leave
www.instaforex.eu >
a website operated by
INSTANT TRADING EU LTD
Open Account

19.08.202010:09 Forex Analysis & Reviews: GBP/USD. August 19. COT report. The UK still hopes to conclude a trade agreement with the European Union. Bull traders are not going to back down

This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here.

GBP/USD – 1H.

Exchange Rates 19.08.2020 analysis

According to the hourly chart, the quotes of the GBP/USD pair continue to grow. The upward trend line at this time characterizes the mood of traders as "bullish", however, the pair's quotes have already moved quite far away from it. This suggests that the "bullish" mood is increasing. Thus, the British pound is again in high demand in the market, despite the fact that there is almost no positive news from the UK itself. Let me remind you that the latest economic reports were extremely weak, especially with regard to GDP. However, traders believe that things are even worse in America. At the same time, the seventh round of negotiations on a post-Brexit deal between the EU and Britain started in Brussels. In London, they still believe that a deal can be reached. However, let me remind you that, according to Michel Barnier, London is not too eager to conclude an agreement. According to Barnier, London does not want to give in to the most pressing issues, such as fishing in British waters and competition between British and European companies. Thus, there are very few prerequisites for the next round of negotiations to end in progress.

GBP/USD – 4H.

Exchange Rates 19.08.2020 analysis

On the 4-hour chart, the GBP/USD pair made a consolidation above the corrective level of 161.8% (1.1357), which now allows us to expect continued growth in the direction of the next corrective level of 200.0% (1.3370). There are no emerging divergences today. The rebound of the pair's quotes from the level of 200.0% will allow us to expect a reversal in favor of the US dollar and a slight fall in the direction of the Fibo level of 161.8% (1.3157).

GBP/USD – Daily.

Exchange Rates 19.08.2020 analysis

On the daily chart, the pair's quotes secured above the corrective level of 100.0% (1.3199), which now allows us to continue the growth process in the direction of the next Fibo level of 127.2% (1.3684).

GBP/USD – Weekly.

Exchange Rates 19.08.2020 analysis

On the weekly chart, the pound/dollar pair performed an increase to the lower downward trend line. A pullback from this line may allow the pair to perform a reversal in favor of the US dollar and resume the process of falling towards the approximately 1.1500 level. This is a long-term perspective.

Overview of fundamentals:

On Tuesday, the economic news calendars were empty in the UK and America, however, this did not prevent traders from actively trading, which led to a strong growth in the British pound.

News calendar for the US and UK:

UK - consumer price index (06:00 GMT).

US - publication of the minutes of the Fed meeting (18:00 GMT).

On August 19, the information background will not be strong, however, from the very morning, the British pound received support from the report on inflation in Britain, which increased by the end of July to 1.0% y/y and 0.4% m/m. The main consumer price index was 1.8% y/y. Traders' expectations were much lower.

COT (Commitments of Traders) report:

Exchange Rates 19.08.2020 analysis

The latest COT report on the British pound was absolutely predictable. Large speculators continued to increase long-contracts (+2.5 thousand) in the reporting week and got rid of short-contracts (-8.5 thousand). Thus, the "Non-commercial" group continued to believe in the Briton. The total number of buy positions opened by speculators has been growing for three weeks in a row, and the number of short contracts in their hands has been declining for three weeks in a row. At the same time, the total number of open long and short contracts for all groups of traders is already approximately the same - 171 thousand and 175 thousand. At the beginning of the new week, traders are again actively buying the British dollar.

Forecast for GBP/USD and recommendations to traders:

I recommend selling the British pound with the target of 2964, if the closing level is 161.8% (1.3157). Today, I recommend to stay in the purchases of the British currency with the goal of 1.3370, as it was fixed above the level of 161.8% (1.3157).

Terms:

"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.

"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy currency, not for speculative profit, but to ensure current activities or export-import operations.

"Non-reportable positions" - small traders who do not have a significant impact on the price.

Samir Klishi
Analytical expert of InstaForex
© 2007-2024

Open trading account

InstaForex analytical reviews will make you fully aware of market trends! Being an InstaForex client, you are provided with a large number of free services for efficient trading.




You are now leaving www.instaforex.eu, a website operated by INSTANT TRADING EU LTD
Can't speak right now?
Ask your question in the chat.

Turn "Do Not Track" off