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GBP/USD – 1H.
According to the hourly chart, the quotes of the GBP/USD pair continue the process of falling and have consolidated under the corrective level of 161.8% (1.3375). At the weekend, information came from London, where Health Minister Matt Hancock said that a new strain of coronavirus had appeared in the country and it was already out of control. The UK immediately fell into forced isolation, as most countries of the European Union and the world banned the entry of citizens from Britain into their territories. However, it is already known that a new strain of coronavirus has been detected in Italy, Denmark, and the Netherlands. That is, it is no longer a purely British disease. British Prime Minister Boris Johnson immediately introduced a new quarantine in the country. In many areas of London, there is now the third level of quarantine (the most severe after "lockdown"). However, Johnson also said that the fourth level of quarantine will be introduced in some areas, a new level that will be comparable to "lockdown". The fourth level provides for the closure of shops that do not sell necessities, almost the entire service sector. That is, only those services and enterprises will work, without which the functioning of the state and people's lives are impossible. The Briton, under the influence of this news, finally got a very good reason for falling. There is still no trade deal with the European Union and it is now unclear whether negotiations will continue, as the new coronavirus comes out on top in terms of importance. And the new strain itself has hit the UK most so far, which will affect its economy very much.
GBP/USD – 4H.
On the 4-hour chart, the GBP/USD pair fell to the corrective level of 76.4% (1.3291). The rebound of the exchange rate from this level will allow traders to count on a reversal in favor of the British currency and the resumption of growth, however, the information background pushes the pair down and the fall can be very strong. Fixing under the Fibo level of 76.4% will increase the chances of a further fall towards the next corrective level of 61.8% (1.3174).
GBP/USD – Daily.
On the daily chart, the pair's quotes have secured under the corrective level of 100.0% (1.3513), which now increases the probability of a new fall with the target of the Fibo level of 76.4% (1.3016).
GBP/USD – Weekly.
On the weekly chart, the pound/dollar pair performed an increase to the second downward trend line. A rebound from it in the long term will mean a reversal in favor of the US dollar and a long fall in the British dollar's quotes.
Overview of fundamentals:
On Friday, the UK released a report on retail trade, which grew in November by 2.4%, with higher expectations of traders. There was no further news.
The economic calendar for the US and the UK:
On December 21, the UK and US economic calendars are completely blank, however, the whole world will now be watching for news about the new strain of coronavirus. Also, do not forget about the negotiations on a trade deal between Brussels and London.
COT (Commitments of Traders) report:
The latest COT report showed that speculators were getting rid of both long and short contracts. This again suggests that traders are wary of the British and the information background. It is extremely difficult to predict what will happen to the UK economy in 2021. Therefore, the category of "Non-commercial" traders prefers to close trades, rather than open new ones. This time, speculators closed 4 thousand long contracts and 2.5 thousand short contracts. Thus, the mood of speculators has become much less "bullish". At the same time, the British continued the growth process, thus, I can draw the same conclusion as for the euro. Major traders are preparing for a new fall in the pound.
GBP/USD forecast and recommendations for traders:
I recommend buying the British dollar when the quotes break from any important corrective level, however, it is better to refrain from long positions now. The probability of falling is too high. It was possible to sell the pound when it was fixed under the ascending corridor on the hourly chart. Now it remains only to maintain open short positions.
Terms:
"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.
"Commercial" - means commercial enterprises, firms, banks, corporations, companies that buy foreign 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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