GBP/USD – 1H.
According to the hourly chart, the GBP/USD pair reversed in favor of the US currency on Friday and consolidated under the corrective level of 23.6% on the small Fibo grid. Thus, the fall in quotes can now be continued toward the next corrective level of 38.2% (1.3830). The drop in quotes on Friday was caused by American statistics, which turned out to be very strong and exceeded traders' expectations. But there was no news in the UK. Following the results of the last trading day, bear traders managed to overcome the important support level of 1.3884, from which the pair rebounded several times. Thus, the US currency has good prospects for continuing to fall. This week, all traders' attention will be focused on the report on GDP in the UK and inflation in the US.
The main question about the British economy right now is precisely the pace of its recovery. Because if it is high in the US, then they are not in Britain. There are also rumors around the Bank of England that it may announce the end of the quantitative stimulus program in the coming months. But there must be grounds for this. There should be a good recovery of the labor market. However, it will be possible to understand this only this autumn when the state aid programs for companies and enterprises aimed at preserving jobs during the pandemic and crisis will end. There must be high inflation so that the Bank of England is forced to look towards tightening monetary policy. And, of course, there should be high GDP growth rates so that the economy does not have to continue to stimulate. This week, we will find out how fast the UK economy grew in the second quarter.
GBP/USD – 4H.
The GBP/USD pair on the 4-hour chart performed a new fall to the corrective level of 23.6% (1.3870) and closed below it. This closure allows us to assume a further drop in quotes in the direction of 38.2% and 23.6% on the small Fibo grid. However, earlier, the quotes twice performed a reversal in favor of the British in the area where they are now. Thus, it would help if you were very careful with the sales of the pair.
News calendar for the USA and the UK:
On Monday, the calendars of economic events in the UK and the US do not contain a single interesting entry. All the most important reports are scheduled for Wednesday and Thursday. Today, there will be no information background.
COT (Commitments of Traders) report:
The latest COT report from August 3 on the British dollar showed that the mood of major players changed to "bullish," as speculators opened 3,370 long contracts and closed 3,735 short contracts in the reporting week. Thus, the total number of long contracts on their hands again exceeds the total number of short contracts. Such a change in the mood of the "Non-commercial" category of traders may mean that major players are not ready for further sales of the British dollar. If so, then the British currency may begin to be in demand again among speculators. I also want to note that the total number of long and short contracts for all traders is now almost the same. Therefore, bull traders still do not have a strong advantage yet.
GBP/USD forecast and recommendations for traders:
Today, I do not recommend buying the pair since it is in a position where it is very difficult to expect new growth in quotes. There are no signals for the Briton to buy now. It was recommended to sell the pound if a close is made under 1.3884 on the hourly chart with a target of 1.3830. Today, these positions can be maintained with a Stop Loss order over 1.3884.
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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