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GBP/USD – 1H.
According to the hourly chart, the GBP/USD pair quotes continue the growth process and closed above the corrective level of 76.4% (1.3099). Thus, the growth process can be continued towards the next corrective level of 100.0% (1.3176). The information background yesterday was extensive and interesting. In addition to the ongoing vote counting in the US, the Fed and the Bank of England held meetings. And I must say that there were some surprises. For example, the Bank of England expanded its stimulus program by 150 billion pounds. Most traders expected the Central Bank to increase it by 100 billion. However, the second wave of the pandemic and the continued absence of a trade agreement with the European Union make their adjustments to the current situation. The Bank of England also lowered its GDP forecasts for 2020-2021. The Central Bank of Great Britain did not change the rate. The Fed, in turn, also left rates unchanged, as well as the volume of the asset purchase program. However, the cover letter states that the risks of a pandemic continue to harm economic activity, employment, and inflation. The Fed is going to keep rates at record lows until inflation returns to 2% and employment levels match pre-crisis levels. That is, neither the Bank of England nor the Fed has said anything that could support their national currencies. Nevertheless, for most of the past day, I can conclude that the growth of the British was not a reflection of the actions and statements of the Fed and the Bank of England.
GBP/USD – 4H.
On the 4-hour chart, the GBP/USD pair continues to grow in the direction of the corrective level of 23.6% (1.3191). The rebound of quotes from this Fibo level will allow traders to expect a reversal in favor of the US dollar and a slight drop in the direction of the corrective level of 38.2% (1.3010). The looming bearish divergence in the CCI indicator increases the probability of quotes rebounding from the level of 23.6%. Fixing the pair's rate above the level of 23.6% will increase the chances of further growth towards the next level of 0.0% (1.3481).
GBP/USD – Daily.
On the daily chart, the pair's quotes have consolidated above the corrective level of 76.4% (1.3016), which now allows us to expect growth in the direction of 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. However, in recent weeks, the pair has made new attempts to gain a foothold over both trend lines.
Overview of fundamentals:
On Thursday, the Bank of England met in the UK and the Fed in the US. Despite the status of these events, traders paid almost no attention to them.
News calendar for the US and the UK:
US - unemployment rate (13:30 GMT).
US - change in the number of people employed in the non-agricultural sector (13:30 GMT).
US - change in the average hourly wage (13:30 GMT).
On November 6, the news calendar contains only American news. However, it is very important. If the Nonfarm report does not disappoint, the US dollar may start to grow today.
COT (Commitments of Traders) report:
The latest COT report on the British pound showed that the mood of the "Non-commercial" category of traders became more "bearish" over the reporting week. Speculators got rid of 8,297 long contracts and 3,408 short contracts. Thus, in general, speculators got rid of any contracts for the British. However, it is mostly from long contracts. This suggests that the major players do not believe in the pound. It is extremely difficult to do this in the current conditions, as the prospects for the British economy remain extremely vague. Since August, the total number of long contracts in the hands of speculators has decreased to an absolute minimum – only 31,013. The total number of open contracts among all categories of traders has been almost the same for two months.
Forecast for GBP/USD and recommendations for traders:
Today, I recommend selling the GBP/USD pair with targets of 1.3053 and 1.3014, if the quotes close under the Fibo level of 76.4% (1.3099) on the hourly chart. I recommend buying the British dollar with a target of 1.3264 if a close above the level of 1.3176 is made on the hourly chart.
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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