GBP/USD – 1H.
According to the hourly chart, the GBP/USD pair performed a reversal in favor of the British currency on Friday and increased almost to the corrective level of 50.0% (1.3792) on the small Fibo grid. However, a day earlier, the British quotes were declining, and they were growing. Therefore, at this time, I conclude that traders are confused with the information background and cannot draw unambiguous conclusions. The Briton has been working in a limited area almost since the beginning of this year and cannot leave it. All attempts to close below the level of 1.3600 were unsuccessful. Earlier, the pair also failed to close above 1.4240. Thus, now the mood of traders is characterized as "bullish" since there is an ascending trend line on the chart. Closing under it will work again in favor of the US currency and a new fall in the direction of 1.3600. The US dollar may be under pressure from traders until mid-September, when everyone again waits for Jerome Powell's speech.
On Friday, Powell said that the labor market is recovering and doing it at a very good pace. However, it is still far from a full recovery, from which we can conclude that the QE program will be in effect for quite a long time. Perhaps in truncated volumes, but it will still work. Regarding inflation, Powell said that its growth is temporary, and prices for many categories of goods have already stabilized. Thus, by the end of the year, Powell expects inflation to slow down, and in the long term, it will stabilize at the level of 2%. The Fed president also said it would be appropriate to complete the QE program this year, but he did not name any specific dates. Powell also noted that the coronavirus may slow down the economic recovery this fall, still representing a significant risk factor. Also, on Friday, reports on personal income and expenses of Americans and the consumer confidence index from the University of Michigan were released in the United States. These data slightly supported the dollar but did not have a special impact on the mood of traders.
GBP/USD – 4H.
The GBP/USD pair on the 4-hour chart performed a new reversal in favor of the British and closed above the Fibo level of 23.6%. As a result, the growth process can now be continued toward the corrective level of 38.2% (1.3642). However, I now recommend paying more attention to the junior chart, where there is a trend line. Jerome Powell made it clear that the Fed will not rush to any decisions. Thus, the US currency may be under pressure from traders in the coming weeks.
News calendar for the USA and the UK:
US - change in the volume of pending transactions for the sale of housing (14:00 UTC).
On Monday in the UK, the calendar of economic events does not contain a single interesting entry. In America, there will be one report. In general, there will be very few interesting reports in the UK this week, but there will be something to pay attention to in the US.
COT (Commitments of Traders) report:
The latest COT report from August 24 on the British showed that the mood of major players had become sharply more "bearish." During the reporting week, speculators closed 2,266 long contracts and immediately opened 18,903 short contracts. Thus, now the total number of long contracts in the hands of speculators is less than the total number of short contracts. In one week, the mood of speculators has changed dramatically. However, can we conclude that the Briton will now continue to fall? As I have already said, traders have big problems with closing at 1.3600, and at the moment, the British dollar continues to grow. The further fall of the British is not guaranteed.
GBP/USD forecast and recommendations for traders:
Today, I recommend buying the pair if there is a rebound on the hourly chart from the levels of 1.3747 or 1.3731, with targets of 1.3792 and 1.3830. I recommend selling the pound with targets of 1.3747 and 1.3731 if a rebound from the level of 1.3792 is performed on the hourly chart.
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 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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