GBP/USD – 1H.
According to the hourly chart, the quotes of the GBP/USD pair performed a rebound from the Fibo level of 100.0% (1.3266) and a reversal in favor of the British currency with a resumption of growth in the direction of the corrective level of 161.8% (1.3397). Thus, the mood among traders remains "bullish". On Friday, Bank of England Governor Andrew Bailey delivered a speech at the Jackson Hole symposium. The head of the British Central Bank said that it still has many tools in its arsenal to support the economy if the pace of its recovery from the crisis caused by the COVID epidemic is weak. Andrew Bailey said that the Bank of England could resort to negative rates and further expand the QE asset purchase program if necessary. Also, the Central Bank of Great Britain is not going to tighten monetary policy until the time when the economy fully recovers from the crisis. Thus, like Fed Chairman Jerome Powell, Bailey does not expect a rapid economic recovery in the near future and, on the contrary, is considering the possibility of introducing additional stimulus measures.
GBP/USD – 4H.
On the 4-hour chart, the GBP/USD pair performed a consolidation above the corrective level of 161.8% (1.3157) and an increase to the corrective level of 200.0% (1.3373). The rebound from this level of Fibo will now work in favor of the US currency and some fall in the direction of the level of 161.8%. The upward trend corridor continues to characterize the current mood of traders as "bullish". Fixing the pair's exchange rate above the 200.0% level will increase the probability of further growth of quotes in the direction of the next corrective level of 261.8%.
GBP/USD – Daily.
On the daily chart, the pair's quotes performed a consolidation above the corrective level of 100.0% (1.3199), which now allows us to count on continuing growth in the direction of the next Fibo level of 127.2% (1.3684).
GBP/USD – Weekly.
On the weekly chart, the pound/dollar pair closed above the lower downward trend line. Thus, the growth process can now be continued in the direction of the second downward trend line, fixing above which will further increase the probability of further growth of the British dollar.
Overview of fundamentals:
There were no economic reports in the UK on Friday. The only important event of the day was Andrew Bailey's performance at Jackson Hole.
News calendar for the US and UK:
On August 31, the UK and American news calendars do not contain any important entries, so the background information will be missing on Monday.
COT (Commitments of Traders) report:
The latest COT report on the British dollar showed a sharp drop in interest among speculators in this currency. A group of non-commercial traders cut both long and short contracts in equal amounts during the reporting week. Thus, despite the fact that the number of contracts focused on their hands decreased by 19 thousand, the mood of large traders has not changed, that is, it has not become more "bearish". Thus, according to the COT report, there are still no prerequisites for the end of the upward trend. Moreover, in the last days of last week, the British dollar resumed its growth, so we can assume that the "bullish" mood among major traders will increase even more. The reduction in the number of contracts for both the "Non-commercial" group and all groups of traders combined did not affect the pair's volatility in any way.
Forecast for GBP/USD and recommendations for traders:
Today, I recommend selling the British currency with a target of 1.3266, if the rebound from the level of 200.0% is performed on the 4-hour chart. New purchases of the British dollar will be possible if the quotes close above the level of 200.0% on the hourly chart with a target of 1.3397.
Terms:
"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.
"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy currency, not for speculative profit, but to ensure current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.
