GBP/USD – 1H.
Hello, traders! According to the hourly chart, a strong drop in quotes continues. The GBP/USD pair continues to move from one correction level to another. I have built a new downward trend corridor, which, as well as possible, shows the "bearish" mood of traders, which does not change in recent days and does not weaken. The pair has made a consolidation under the corrective level of 200.0% (1.2251), thus, the chances of a further fall in the quotes increase. Closing the pair's rate above the trend corridor will be the first signal that the downward trend is complete and the mood of traders will change to "bullish".
GBP/USD – 4H.
As seen on the 4-hour chart, the GBP/USD pair is identical to the hourly chart. The pair's quotes made a consolidation at the same level of 200.0% (1.2255), which increases the probability of further fall in the direction of the next Fibo level of 261.8% (1.1959). No indicator has any pending divergences on March 17. There are also no new graphical models or constructions at the moment.
GBP/USD – Daily.
As seen on the daily chart, the graphic picture remains the most interesting and impressive. All the previous target levels, which I gave on the signal about the rebound from the corrective level of 23.6% (1.3146), have been fulfilled. The collapse at the moment stopped near the corrective level of 76.4% (1.2327), and even then not for long. At the moment, the fall in quotes is resumed, as the level of 76.4% could not resist the pressure of bear traders. Thus, the next target is the corrective level of 100.0% (1.1959).
Overview of fundamentals:
There was no important news from the US or the UK on Monday. Both countries continue to fight the infection, closing borders, air traffic, and taking internal measures to stop the spread of infection. The central banks of these countries have done everything possible to soften monetary policies to a minimum. However, the current situation with the epidemic may require even more easing and incentives. In particular, we are now talking about tax breaks for citizens and all types of businesses in almost any country affected by the pandemic. Such steps require a complete review of fiscal policies. In any case, from my point of view, until a cure for the COVID-19 virus is found, it is not worth dreaming about any improvements. The best thing governments can do is reduce the negative impact of the virus on citizens, businesses, and the economy.
The economic calendar for the US and the UK:
United Kingdom - change in the number of applications for unemployment benefits (09:30 GMT+00).
United Kingdom - unemployment rate (09:30 GMT+00).
United Kingdom - change in average earnings (09:30 GMT+00).
USA - change of volume of retail trade (12:30 GMT+00).
USA - the change in the volume of industrial production (13:15 GMT+00).
On March 17, quite important news will arrive from both Britain and America. Unfortunately, looking at the chart of the movement of the pound/dollar pair, it becomes obvious that no news and economic reports now have any effect on supply and demand for the British currency. Perhaps the situation will change today?
COT report (Commitments of Traders):
A new report from Commitments of Traders showed that the growth rate of Long and Short positions among speculators has decreased. But they have increased for hedgers. Thus, the total number of contracts for buying and selling among major players has again remained almost unchanged, only slightly decreased. First of all, due to Long positions, which is not surprising, given the strong collapse of the British dollar's quotes. Given the fact that speculators were particularly eager to reduce their Long positions, we can assume that the "bearish" mood will continue. However, almost complete equality in the total number of Long and Short can cause a pullback of quotes up, in other words, the new growth of the pound/dollar pair. The situation is now confusing, and graphical analysis does not give clear signals to buy.
Forecast for GBP/USD and recommendations to traders:
I believe that in the current conditions, opening any transactions is still associated with high risks, as the market remains in a state of shock. At the same time, the signal on the hourly chart - closing at the level of 200.0% (1.2251) and on the daily chart - closing at 76.4% (1.2327) allow traders to still sell the pound. Purchases look more promising, but there are no specific signals right now.
Terms:
"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.
"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy currency to ensure current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.
