GBP/USD. February 18. COT report. Robert Kaplan: We will limit liquidity in the future.

GBP/USD – 1H.

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According to the hourly chart, the quotes of the GBP/USD pair performed a close under the downtrend corridor. Thus, the mood of traders changed to "bearish". Based on this, the fall in quotes can be continued in the direction of the next level of 1.3820. The Briton shows no particular desire to fall. Recent reports from the UK have been quite upbeat. Let me remind you that GDP in the fourth quarter grew by 1%, although many analysts expected this indicator to fall, and inflation accelerated in January to 0.7% y/y. Thus, following the general trend (the euro is also getting cheaper in recent days), the British dollar is declining, but at a very sluggish pace. At the same time, the president of the Federal Reserve Bank of Dallas, Robert Kaplan, after yesterday's "Fed minutes", said that the actions of the Fed partly provoked the recent situation with GameStop shares. Let me remind you that the shares of the GameStop game store began to be bought up by members of the Reddit community by agreement. As a result, multimillion-dollar losses were inflicted on large institutional investors, who did not expect that a whole group of people would start buying up shares of a game store. Kaplan believes that this is partly because the Fed buys $ 120 billion worth of securities and bonds a month, thus creating excessive liquidity in the market. "However, we need to keep doing what we're doing. If we go beyond the limits, then it would be better to start limiting liquidity and normalize monetary policy," says Robert Kaplan.

GBP/USD – 4H.

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On the 4-hour chart, the GBP/USD pair made a return to the level of 1.3850. The formed bullish divergence allows traders to expect a reversal in favor of the British dollar and some growth in the direction of the level of 161.8% (1.3979). The rebound of quotes from the level of 1.3850 will also work in favor of the British currency. The closing of the pair's rate below the level of 1.3850 will allow traders to count on the continuation of the fall in the direction of the Fibo level of 127.2% (1.3701) and the trend line, which still characterizes the mood of traders as "bullish".

GBP/USD – Daily.

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On the daily chart, the pair's quotes made a consolidation above the corrective level of 100.0% (1.3513), which still allows us to count on continued growth in the direction of the Fibo level of 127.2% (1.4084).

GBP/USD – Weekly.

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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:

On Wednesday, the US and UK calendars were filled with important economic reports, but traders reacted to them selectively and not too actively.

News calendar for the United States and the United Kingdom:

US - number of initial and repeated applications for unemployment benefits (13:30 GMT).

On February 18, the calendars of economic events in the UK and the US are almost empty. Thus, the information background today will be very weak or even absent.

COT (Commitments of Traders) report:

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The latest COT report of February 9 on the British pound was quite interesting and noteworthy. In recent weeks, speculators have not made serious steps in the direction of strengthening the "bullish" mood. However, all this time, the pound was still growing. The latest COT report showed an increase in the number of long contracts focused on the hands of the "Non-commercial" category of traders by 6,465 units. At the same time, speculators got rid of 4,660 short contracts. Thus, the Briton grew even without increasing long contracts from speculators. Now it has an even greater chance of continuing growth.

Forecast for GBP/USD and recommendations for traders:

It is recommended to buy the British dollar in the event of a rebound from the level of 1.3850 on the 4-hour chart with a target of 1.3976. However, the rebound was already there, but after it, growth did not begin. Thus, I recommend selling the pound today at the close under the level of 1.3850 on the 4-hour chart with the targets of 1.3820 and 1.3744.

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.

The material has been provided by InstaForex Company - www.instaforex.com

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