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. The new downward trend corridor shows the "bearish" mood of traders, which has not changed 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". It is this signal that can be regarded as a signal to close sales.
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 18. There are also no new graphical models or constructions. There are also no new rebounds from important correction levels.
GBP/USD – Daily.
According to the daily chart, the graphic picture remains the most interesting. 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 of the pair's quotes resumed in the direction of the next corrective level of 100.0% (1.1959), which is not too far away for traders. The rebound of the pound/dollar pair from this level will work in favor of the British dollar and allow traders to expect some growth of the pair, but there is no rebound yet, and closing under this level will increase the chances of continuing the fall in the direction of the Fibo level of 127.2% (1.1538).
Overview of fundamentals:
On Tuesday, several interesting reports came from the UK. For example, the unemployment rate, which rose to 3.9% in January, or average wages, which rose by 3.1%. However, all these reports did not attract any attention from traders. Despite the fact that the data on wages were good, the pound still continued to be under pressure. Reports on industrial production and retail sales in the United States also did not attract any attention.
The economic calendar for the US and the UK:
On March 18, important economic reports and events are not included in the calendar of the UK and the US.
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 any signals to buy. Thus, it is not advisable to open trades against the trend, especially when there is no single signal 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. Fixing quotes above the descending corridor on the hourly chart will be a signal to exit sales for the pound.
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.
