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GBP/USD – 1H.
According to the hourly chart, the quotes of the GBP/USD pair continue the growth after rebounding from the corrective level of 76.4% (1.3522). The consolidation of quotes above the Fibo level of 100.0% (1.3625) increased the probability of further growth of the pair in the direction of the levels of 1.3698 and 1.3744. Once again, we see that the British pound is in demand among traders, although the information background remains quite heavy for this currency. Today, the Governor of the Bank of England, Andrew Bailey, will speak at the civic forum. It is unlikely that Bailey's rhetoric will change from his previous speech. Let me remind you that a week ago Bailey said that "negative rates are problematic", which significantly reduced the likelihood of a rate cut by the Bank of England in the coming months. However, Bailey and several other members of the monetary committee confirmed that the bank continues to explore the possibility of using them. Thus, the decision to reduce the rates can be said to be postponed in the implementation for a few more months, but not completely canceled. Bailey also said at the time that the UK's GDP will not change at best, and in the worst case – will lose two percent in the fourth quarter. The same opinion is shared by Finance Minister Rishi Sunak, who said that "the economy will deteriorate before it gets better". Thus, both Sunak and Bailey note the negative impact of the second and third "lockdowns" in the country. And the longer they continue, the stronger the negative impact on the British economy will be.
GBP/USD – 4H.
On the 4-hour chart, the GBP/USD pair performed a reversal in favor of the British currency and resumed growth in the direction of the corrective level of 127.2% (1.3701). The fourth rebound from this level will again work in favor of the US currency and the resumption of the fall in the direction of the corrective level of 100.0% (1.3481). Closing above the level of 1.3701 will increase the probability of further growth of the British dollar in the direction of the next Fibo level of 161.8% (1.3977).
GBP/USD - Daily.
On the daily chart, the pair's quotes performed a consolidation above the corrective level of 100.0% (1.3513), and then rebound from it. Thus, growth can be continued in the direction of the Fibo level of 127.2% (1.4084). Closing the pair below the level of 100.0% will work in favor of the US currency and some drop in quotes.
GBP/USD - Weekly.
On the weekly chart, the pound/dollar pair completed a close over the second downward trend line. Thus, the chances of long-term growth of the pound are significantly increased.
Overview of fundamentals:
There were no economic reports or other events in the UK and US on Tuesday. The information background was empty, which did not prevent the Briton from starting to grow again.
News calendar for the United States and the United Kingdom:
UK - consumer price index (07:00 GMT).
UK - Bank of England Governor Andrew Bailey will deliver a speech (17:00 GMT).
On January 20, the calendar of economic events in the United States is completely empty. Just the inauguration of Joe Biden. In the UK, the inflation report will be released today and the speech of the Governor of the Bank of England will take place.
COT (Commitments of Traders) report:
The latest COT report from January 12 showed finally serious changes in the mood of major market players. The "Non-commercial" category of traders opened 10,460 long contracts during the reporting week, which is the maximum number of long contracts opened in recent months. Thus, the mood of speculators became sharply more "bullish". 3,200 short contracts were also opened. Thus, in general, speculators have opened almost 14,000 new contracts, which has also not been the case for a very long time. Traders seem to be starting to believe in the British pound again and are also willing to trade the pound more actively than in the past few months. Brexit is behind us, the UK and the EU continue to trade duty-free with each other, so interest in the British is starting to return.
GBP/USD forecast and recommendations for traders:
It was recommended to make purchases of the British dollar when closing quotes above the level of 100.0% (1.3625) on the hourly chart with a target of 1.3698. Now, these positions should be kept open. It is recommended to sell the pound sterling at the rebound from the level of 1.3698 on the hourly chart with a target of 1.3625.
Terms:
"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.
"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy foreign currency, not for speculative profit, but to support 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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