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GBP/USD – 1H.
According to the hourly chart, the quotes of the GBP/USD pair first fell to the corrective level of 61.8% (1.2879), then rebounded from it and turned in favor of the British currency. Thus, the growth of the pair's quotes can be continued in the direction of the downward trend line. The pair's rebound from this line will work in favor of the US currency and resume falling towards the level of 1.2879. Closing quotes above the trend line will significantly increase the probability of further growth of the British dollar. The EU summit is over, however, no results have been achieved. Top EU officials, in particular Charles Michel, said London should be more eager to strike a deal and give in on the most pressing issues. Without this, no agreement can be reached. However, work in this direction will continue despite the fact that the deadlines are already very tight. The final Brexit is less than 10 weeks away. Thus, I believe that if the trade agreement still manages to be agreed upon by some miracle, it is unlikely that the parties will have time to do it before January 1, 2021. The Prime Minister of Great Britain was furious at the lack of progress in the last rounds of talks between Michel Barnier and David Frost. He harshly criticized the EU for failing to give London the "Canadian" version of the agreement and that the EU wants to maintain control over Britain.
GBP/USD – 4H.
On the 4-hour chart, the GBP/USD pair performed a new fall to the Fibo level of 50.0% (1.2867), rebounded from it with a reversal in favor of the British currency, and began a new growth in the direction of the corrective level of 38.2% (1.3010). However, the trend line on the hourly chart is more important now. If bull traders manage to close above it, then the chances of new growth for the British will increase.
GBP/USD – Daily.
On the daily chart, the pair's quotes performed a reversal near the corrective level of 76.4% (1.3016) in favor of the US currency and began the process of falling in the direction of the corrective level of 61.8% (1.2709) The most lower chart still retains the "bearish" mood of traders.
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 a downward trend.
Overview of fundamentals:
There were no important economic reports in the UK on Friday. The results of the EU summit are disappointing for the British. American news, if it had any impact on the mood of traders, it was minimal.
The economic calendar for the US and the UK:
US - Chairman of the Board of Governors Jerome Powell will deliver a speech (12:00 GMT).
On October 19, the UK news calendar does not contain anything interesting. Today, traders will only be able to pay attention to Jerome Powell's speech.
COT (Commitments of Traders) report:
The latest COT report on the British pound that was released last Friday showed that the category of "Non-commercial" traders got rid of short contracts in the reporting week, closing more than 6 thousand in total. Long-contracts speculators opened only 149. Thus, the mood of major speculators has become more "bullish", which is quite strange, since in recent months there has been a desire to sell the British, rather than buy it. However, the last three weeks are left to the bull traders. At the same time, it is very difficult to say that the pound sterling is showing strong growth. Most likely, the situation is as follows: due to the strong information background, major players often change their decisions, and the Briton often changes the direction of movement.
Forecast for GBP/USD and recommendations for traders:
Today, I recommend buying the GBP/USD pair with a target of 1.3096, if the consolidation above the trend line on the hourly chart is completed. I recommend selling the British dollar with the targets of 1.2928 and 1.2879 if there is a rebound from the trend line.
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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