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GBP/USD – 1H.
According to the hourly chart, the quotes of the GBP/USD pair performed a reversal in favor of the British on January 5 and resumed the growth process. Thus, the growth of quotes can be continued today in the direction of the corrective level of 261.8% (1.3698). The key topics of recent days are the topic of a new "lockdown" in the UK and the topic of a new referendum on Scottish independence. Everything is very clear with "lockdown". New quarantine = a new contraction of the British economy, which is already going through hard times. It's more complicated with Scotland. Prime Minister Nicola Sturgeon has said for more than a year that her country does not want to leave the European Union. The Scottish people did not choose to leave the EU in the 2016 referendum. Thus, she is asking Boris Johnson for permission to hold another referendum (the last one was in 2014). However, London does not intend to grant Edinburgh a new right to hold a referendum every 5 years. According to Johnson, such events are held once in a generation. Thus, London has already refused Nicola Sturgeon several times, however, she is not going to give up and intends to strengthen her position in the Scottish Parliament, which will allow her to put even more pressure on London. Thus, the UK is currently facing a new potential problem. If Edinburgh continues to push so hard for the right to hold a referendum, it could lead to a worsening of relations between Scotland and the UK.
GBP/USD – 4H.
On the 4-hour chart, the GBP/USD pair performed a rebound from the corrective level of 127.2% (1.3701) with a reversal in favor of the US dollar. However, the process of falling quotes has already ended, the pair is again aimed at the level of 127.2%. Fixing the quotes above this level will increase the pair's chances of further growth in the direction of the next Fibo level of 161.8% (1.3977). Today, the divergence is not observed in any indicator.
GBP/USD – Daily.
On the daily chart, the pair's quotes performed a consolidation above the corrective level of 100.0% (1.3513). Thus, the growth process can be continued in the direction of the next Fibo level of 127.2% (1.4084).
GBP/USD – Weekly.
On the weekly chart, the pound/dollar pair closed above the second downward trend line. Thus, the chances of long-term growth of the pound are significantly increased.
Overview of fundamentals:
There were no important economic reports in the UK on Tuesday. The information background was not strong and even the news of the third "lockdown" in the UK did not put too much pressure on the Briton.
The economic calendar for the US and the UK:
UK - services PMI (09"30 GMT).
US - change in the number of employees from ADP (13:15 GMT).
UK - Bank of England Governor Andrew Bailey will deliver a speech (14:00 GMT).
US - PMI for the services sector (14:45 GMT).
US - publication of the minutes of the Fed meeting (19:00 GMT).
On January 6, the calendars of economic events in the UK and the US contain quite a lot of interesting events. For example, Andrew Bailey's speech or the ADP report.
COT (Commitments of Traders) report:
The latest COT report from December 29 showed that speculators were getting rid of both long contracts and short contracts. In small quantities. In total, the "Non-commercial" category of traders closed 1,640 long contracts and 296 short contracts. Thus, their mood became a little more bearish. Also, the total number of contracts focused on the hands of speculators does not speak unequivocally in favor of further growth of the British dollar. The number of long contracts remains large. Since October, this distribution has changed dramatically. As of October 1, the number of long contracts was 35,000 and short – 52. Thus, over the past three months, major traders have significantly increased their "bullish" mood.
GBP/USD forecast and recommendations for traders:
It is recommended to buy the British dollar today when the pair closes above the level of 1.3618 with a target of 1.3698 on the hourly chart. I recommend selling the pound at a rebound from the level of 1.3701 on the 4-hour chart with a target of 1.3618. The close below the trend line has already been completed.
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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