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GBP/USD – 1H.
According to the hourly chart, the quotes of the GBP/USD pair resumed the growth process and consolidated above the corrective level of 100.0% (1.3006). In addition, a new upward trend line has appeared, which again characterizes the mood of traders as "bullish". Thus, the US currency paired with the British continues its decline. This is not surprising, since the news from America continues to be very difficult. In addition to the recovery of Donald Trump and the continuation of the presidential race, there is another important topic that is of great importance for the American economy. This is a new aid package for the economy as part of the recovery from the pandemic crisis. Over the weekend, it became known that the speaker of the House of Representatives, Nancy Pelosi, rejected another Republican proposal, which was already an impressive $ 1.8 trillion. The most interesting thing is that the Republicans who control the Senate also refused to accept this package as "excessively expensive". Nancy Pelosi still believes that the minimum aid to the American economy should be $ 2.2 trillion and is not ready to accept a smaller offer. In general, the aid package was not accepted again. Thus, it is not surprising that the US currency continues to decline. In the UK, it must be admitted that things are also very bad right now. However, traders seem to be more interested in America.
GBP/USD – 4H.
On the 4-hour chart, the GBP/USD pair fell to the corrective level of 50.0% (1.2867), rebounded from it, and turned in favor of the British pound. Fixing the pair's quotes above the level of 38.2% (1.3010) allows traders to expect continued growth in the direction of the next Fibo level of 23.6% (1.3191). The ascending trend line on the hourly chart is also important. In general, the pair took a big step to break out of the range between the levels of 1.2720 and 1.3010, in which it was trading for quite a long time.
GBP/USD – Daily.
On the daily chart, the pair's quotes performed a new growth to the Fibo level of 76.4% (1.3016). Fixing the pair's rate above this level will increase the probability of continuing growth towards the next corrective level of 100.0% (1.3513).
GBP/USD – Weekly.
On the weekly chart, the pound/dollar pair closed under the lower downward trend line, thus, a false breakout of this line followed earlier. The pair returns to the downward trend.
Overview of fundamentals:
On Friday, the UK released quite important economic reports that could not support the British. However, the pound that grew throughout the day. GDP grew by just 2.1% m/m in August, while industrial production grew by 0.3% m/m. Traders' expectations were much higher in both cases. Despite such weak figures, traders continue to pay more attention to the information background from the United States.
US and UK news calendar:
UK - Bank of England Governor Andrew Bailey will deliver a speech (16:00 GMT).
October 12, the US calendar is empty again. The UK will host a new speech by Bank of England Governor Andrew Bailey. However, traders are now set to sell the dollar and may not pay attention to this event.
COT (Commitments of Traders) report:
The latest COT report on the British pound that was released last Friday showed that there were no changes during the reporting week. The "Non-commercial" category of traders opened only a thousand long contracts and closed 435 short contracts. Thus, the changes are minimal and do not allow us to draw any long-term conclusions. In total, speculators continue to hold a larger number of short contracts, which indicates their belief in the fall of the British dollar. And it is in the last two weeks that the number of these contracts has grown significantly. In general, the market is in almost perfect balance. The COT report shows that a total of 164,622 long contracts and 164,137 short contracts are open.
Forecast for GBP/USD and recommendations for traders:
Today, I recommend buying the GBP/USD pair with a target of 1.3096, as it was fixed above the corrective level of 100.0% (1.3006) on the hourly chart. I recommend selling the British dollar if it closes under the rising trend line on the hourly chart with targets of 1.2879 and 1.2840.
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 for 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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