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GBP/USD – 1H.
According to the hourly chart, on January 6, the quotes of the GBP/USD pair performed a rebound from the trend line, then from the corrective level of 100.0% (1.3625) and twice began a new process of falling in the direction of the corrective level of 76.4% (1.3522). Fixing the pair above the trend line will change the mood of traders to "bullish" and allow you to count on the new growth of the British dollar. Meanwhile, in the United States, a complete and total victory of the Democrats in the elections to the Lower House, Senate, and White House took place. Supporters of the current US President Donald Trump, after learning that the Democrats won in Georgia, decided to storm the US Congress. The riots began when both houses of Congress were in the process of ratifying the election results. At least four deaths were reported as a result of the assault. Nevertheless, a few hours later, the police and the National Guard managed to quell the riot, and Congress resumed its session. Thus, in the course of today, Joe Biden can still be confirmed as the new president of the United States. Meanwhile, many in Congress believe that incumbent President Donald Trump sent extremists to the Capitol and should be held accountable for it. The idea of impeaching the president has already been voiced. Almost all social networks blocked the accounts of Donald Trump and deleted his last posts concerning the rally near the Congress. Several Republican senators refused to support Trump after the incident in Washington.
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 currency. In recent days, however, the pair has not moved up or down. The events of this night were supposed to create pressure on the US currency, but nothing happened. The pair's quotes have an equal chance of returning to the corrective level of 127.2% and the corrective level of 100.0% (1.3481). It is better to focus on the hourly chart.
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:
On Wednesday, the UK released a report on business activity in the service sector, which was worse than traders' expectations, and also delivered a speech by the Governor of the Bank of England, Andrew Bailey, who did not report anything important. American statistics were also worse than expected, but in general, the British dollar fell by only a few points over the past day.
The economic calendar for the US and the UK:
UK - PMI for the construction sector (09:30 GMT).
US - number of initial and repeated applications for unemployment benefits (13:15 GMT).
US - ISM Composite index for the non-manufacturing sector (15:00 GMT).
On January 7, the calendars of economic events in the UK and the US are not empty, but there will be few really important reports.
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, but literally by several thousand. Since October, this distribution has changed dramatically. As of October 1, the number of long contracts was 35 thousand, 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 rebounds from the level of 76.4% (1.3522) with the target of the trend line on the hourly chart. I recommend selling the pound sterling at a rebound from the trend line on the hourly chart with the target level of 76.4% (1.3522).
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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