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GBP/USD – 1H.
According to the hourly chart, the quotes of the pound/dollar pair performed a reversal near the corrective level of 76.4% and an increase to the Fibo level of 61.8% (1.3105). The pair's rebound from this level will work in favor of the US dollar and resume falling towards the level of 1.3067. Closing the pair's rate above the level of 61.8% will increase the chances of further growth in the direction of 1.3136. The British pound is in standby mode as well as the euro/dollar. The latest news from the UK and the US was rather uninteresting. Few traders expected that the negotiations between the EU and Britain will suddenly end with the signing of an agreement, if the parties have already been saying that there is no progress for 5 months. The" stumbling block " remains the issue of European fishermen's access to British waters. The UK wants full independence from the European Union and is not ready to compromise on this issue. The EU also wants to maintain access to a wealth of British waters. Thus, the probability of a deal is still extremely low. There are other issues where the parties cannot agree. The EU, for example, requires fair competition between British and European companies, which is again refused by London. Also, Britain does not want the European Court of Justice to be the last resort in all disputes with the EU.
GBP/USD – 4H.
On the 4-hour chart, the GBP/USD pair performed a reversal in favor of the US currency and a new consolidation under the corrective level of 161.8% (1.3157). The drop in quotes continues in the direction of the lower border of the upward trend corridor. Fixing the pair's exchange rate under the ascending corridor will increase the probability of a further fall in the quotes towards the level of 127.2% (1.2964). Today, the divergence is not observed in any indicator.
GBP/USD – Daily.
On the daily chart, the pair's quotes performed a rebound from the corrective level of 100.0% (1.3199), so the fall in quotes can be continued in the direction of the corrective level of 76.4% (1.2776).
GBP/USD – Weekly.
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 falling towards the approximately level of 1.1500. This is a long-term perspective.
Overview of fundamentals:
There was no single economic report on Monday in the UK and America. Thus, the low activity of traders was caused by the lack of information background.
News calendar for the US and UK:
US - consumer confidence indicator (14:00 GMT).
On August 25, the UK and US news calendars were almost empty. Thus, the impact of the information background on the auction will be absent or minimal.
COT (Commitments of Traders) report:
The latest COT report on the British pound again showed a serious increase in the number of long contracts in the hands of speculators (the "Non-commercial" group). Thus, according to the latest COT report, we can only say that the "bullish" mood of the most important group of traders has only strengthened. At the same time, speculators reduced the number of short-contracts by 2.2 thousand. Thus, with such data, the British can resume the growth process at any time. I recommend treating the COT report as a fundamental signal. And every signal requires confirmation. Therefore, more attention should still be paid to graphical analysis. And the COT report only adds to this data. And the latest COT report says that the probability of a strong fall in the British pound is low.
Forecast for GBP/USD and recommendations to traders:
Today, I recommend selling the British currency with the goal of the lower limit of the corridor on the 4-hour chart, if a new close is made under the level of 76.4% (1.3136) on the hourly chart or a rebound from the level of 61.8% (1.3105). Purchases of the British currency will be possible if the quotes break off from the lower border of the ascending corridor on the 4-hour chart with the goal of the Fibo 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.
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