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GBP/USD – 1H.
According to the hourly chart, the GBP/USD pair continued the process of falling yesterday after consolidating under the corrective level of 100.0% (1.3411). However, today, it performed a return to this level. The rebound of quotes from this level will allow us to count on a reversal in favor of the US currency and the resumption of the fall in the direction of the corrective level of 127.2% (1.3297). Fixing the pair's rate above the level of 100.0% will work in favor of continuing growth in the direction of the upper limit of the downward trend corridor, which keeps traders' mood "bearish". Meanwhile, Britain and the European Union still cannot come to a common opinion on the issue of the Northern Ireland border and the mechanism of inspections and customs on it. London wants to completely revise this protocol, and the European Union refuses such an option.
In recent weeks, the tension in this issue has escalated to such an extent that London has begun to threaten Article 16, which may allow it not to fulfill certain points of the agreement on withdrawal from the EU. Brussels, in turn, threatened to suspend the entire withdrawal agreement if London continued to try to change the terms of the agreement already reached and signed unilaterally. Thus, we can talk about a new crisis that has arisen based on Brexit. Today, on Friday, the parties will have to hold emergency talks, which will have to ease the tension at least a little. However, someone will have to give in to something. Remembering how difficult the negotiations on Brexit and the trade deal were, we can assume that this time they will be delayed for at least a few months. The pound is not hopeless at the moment. It has already fallen quite a lot in recent weeks, so it can count on a certain growth even today. But to do this, you need to close above 1.3411. The pound will be able to count on something more only after closing above the trend corridor.
GBP/USD – 4H.
On the 4-hour chart, the quotes of the British performed a close under the corrective level of 50.0% (1.3457) and continued the process of falling towards the next Fibo level of 61.8% (1.3274). The bullish divergence of the MACD indicator has formed, so now the pound gets the opportunity to start growing in the direction of 1.3457. Closing quotes above the level of 50.0% will increase the probability of continuing to fall in the direction of the next corrective level of 38.2% (1.3642).
News calendar for the USA and the UK:
US - consumer sentiment index from the University of Michigan (15:00 UTC).
On Friday in the UK and the US, the calendar of economic events is almost empty. There will be only one report in the US, but it is very weak. Thus, the entire information background of today is very weak.
COT (Commitments of Traders) report:
The latest COT report from November 2 on the pound showed that the mood of major players has become a little less "bullish". In the reporting week, speculators opened 5,811 long contracts and 7,464 short contracts. Thus, the number of long contracts in the hands of major players still exceeds the number of short contracts by 17 thousand, but the gap is narrowing. In recent weeks, major players do not have any clear mood and then increase purchases, then increase sales, and the total number of long and short contracts for all categories of traders is the same (160K - 157K). Thus, after several weeks of an active build-up of longs, it may be the turn of shorts.
GBP/USD forecast and recommendations to traders:
Yesterday, I recommended selling the pair with targets of 1.3297 and 1.3274, as the closing was made under the level of 1.3411. In case of a rebound from the 1.3411 level, you can stay in sales. I recommend buying a Brit when closing above the level of 100.0% (1.3411) with a target of 1.3511.
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 to make speculative profits, but to ensure current activities or export-import operations.
"Non-reportable positions" are small traders who do not have a significant impact on the price.
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