GBP/USD – 1H.
According to the hourly chart, the quotes of the GBP/USD pair resumed the process of falling yesterday and reached the lower limit of the descending corridor, from which they rebounded. However, the growth process was short-lived. The pair has already completed a new consolidation under the corrective level of 50.0% (1.2925), which allows traders to expect a continuation of the fall in the direction of the next corrective level of 61.8% (1.2866) and further to 76.4% (1.2793). Meanwhile, negotiations on a trade deal in London continue. They were supposed to be completed yesterday, but earlier the parties said that they were ready to work seven days a week, just to reach an agreement on time. It seems that the work continues to "boil". European Commission chief Ursula von der Leyen said yesterday that the parties had made "good progress" on security and trade issues. However, according to von der Leyen, there are two other areas (fishing and competition) in which the EU would like to see more progress. Thus, it is quite difficult to assess the words of the head of the European Commission unambiguously. Progress is good, however, is it sufficient progress to agree? And what about the most pressing issues of fishing and fair competition? Moreover, there is still no official information from the negotiators. Thus, the fall in the British dollar's quotes in recent days, from my point of view, is quite consistent with the information background.
GBP/USD – 4H.
On the 4-hour chart, the GBP/USD pair has consolidated under the corrective level of 38.2% (1.3010) and continues the process of falling in the direction of the corrective level of 50.0% (1.2867). The pair's rebound from this Fibo level will allow traders to expect a reversal in favor of the European currency and some growth towards the levels of 38.2% and 23.6% (1.3191). Closing quotes below the Fibo level of 50.0% will increase the probability of a further fall towards the next corrective level of 61.8% (1.2720).
GBP/USD – Daily.
On the daily chart, the pair's quotes have consolidated under the corrective level of 76.4% (1.3016), which now allows us to count on a fall in the direction of the corrective level of 61.8% (1.2709).
GBP/USD – Weekly.
On the weekly chart, the pound/dollar pair closed under the lower downward trend line, thus, a false breakout of this line followed earlier. However, in recent weeks, it has made new attempts to gain a foothold over both trend lines.
Overview of fundamentals:
On Thursday, the UK again did not have a single economic report. There was also still no official information about the progress of negotiations between the UK and the European Union.
News calendar for the US and the UK:
US - main index of personal consumption expenditures (12:30 GMT).
On October 30, the UK news calendar again does not contain a single report or event, but important information can be received from London at any time. There will also be no important economic reports in America today. Thus, the information background may be practically absent if the negotiations in London are extended today.
COT (Commitments of Traders) report:
The latest COT report on the British pound that was released last Friday showed that the mood of the "Non-commercial" category of traders has become more "bullish". Speculators immediately increased to 4.5 thousand long-contracts and got rid of 4 thousand short-contracts. Thus, after three weeks of "bearish" advantage, speculators are again inclined to buy the British. However, I believe that such a change in mood does not mean anything specific. In a week or two, major players can start building up short contracts again. And the total number of long and short contracts focused on their hands is almost the same. Thus, I would conclude that the major players are now in disarray.
Forecast for GBP/USD and recommendations for traders:
Today, I recommend selling the GBP/USD pair with a target of 1.2867 and opening new sales when this level is overcome with a target of 1.2720. I recommend buying the British dollar with a target of 1.3010 if the rebound from the level of 50.0% (1.2867) on the 4-hour chart is completed.
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 for current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.
