GBP/USD – 1H.
According to the hourly chart, the quotes of the GBP/USD pair continued the growth process during the past day and turned out to be around the level of 1.3820 by this morning. The rebound of the pair's rate from this level will allow traders to count on a reversal in favor of the US dollar and a slight drop in the direction of the level of 127.2% (1.3744) Closing the pair above the level of 1.3820 will increase the chances of further growth in the direction of the next corrective level of 161.8% (1.3895). The upward trend corridor characterizes the current mood of traders as "bullish". Meanwhile, the British economy is not feeling any optimism at the moment. I said earlier that the UK's GDP will lose 1-2% in the fourth quarter. The country continues to operate "lockdown", continues the process of vaccination of the population. And although Britain is far ahead of the rest of the European Union in terms of the latest indicator, the British economy is in a deplorable state after Brexit.
The Bank of England is on the verge of a new cut in the key rate but has not yet decided to do so. The Labor Party believes that it is necessary now to extend the duration of government funding programs that help businesses and citizens overcome the consequences of the pandemic. The current aid programs are valid until March 3, and new aid programs must be already in effect on March 4, and not as they are now in the United States - Democrats and Republicans have not been able to agree on the amount of financial assistance for their economy for six months. Therefore, British politicians are calling on the British Finance Minister Rishi Sunak to start developing new aid packages now. All this suggests that the British economy is keeping afloat, but without the help of the state and the central bank, it can sink. But all these facts do not pay any attention to bull traders. The British dollar continues the growth process, which is most likely caused by the fall of the dollar.
GBP/USD – 4H.
On the 4-hour chart, the GBP/USD pair performed a close over the rectangle that displayed the sideways corridor of the last few weeks. Thus, the growth process can be continued in the direction of the corrective level of 161.8% (1.3977) through the intermediate level of 1.3850. Today, the divergence is not observed in any of the indicators. I recommend paying more attention to the hourly chart, where there is a trend corridor.
GBP/USD – Daily.
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.
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 Tuesday, the calendars of economic events in the UK and the US were empty. The influence of the information background was absent.
News calendar for the United States and the United Kingdom:
US - consumer price index (13:30 GMT).
UK - Bank of England Governor Andrew Bailey will deliver a speech (17:00 GMT).
US - Federal Reserve Board of Governors Chairman Jerome Powell will deliver a speech (19:00 GMT).
On February 10, there will be speeches by Andrew Bailey and Jerome Powell, as well as an important report on inflation in the United States.
COT (Commitments of Traders) report:
The latest COT report from February 2 for the British was much more "calm" than for the Europeans. During the reporting week, the "Non-commercial" category of traders opened 5.5 thousand long contracts and only 2 hundred fewer short-contracts. Thus, the mood of the major players, according to the COT report, has not changed. Speculators continue to maintain a very restrained "bullish" mood, which can not be said by the behavior of the Briton itself, which continues to remain very high and does not show any signs of having a desire to start falling.
Forecast for GBP/USD and recommendations for traders:
It was recommended to buy the British dollar at the close above the level of 1.3744 on the hourly chart with a target of 1.3820. These trades can be held now, and the second (1.3895) is added to the first target (in the case of closing above 1.3820). It is recommended to sell the pound sterling when closing quotes on the hourly chart under the trend corridor with targets of 1.3744 and 1.3698.
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