GBP/USD - 1H.
According to the hourly chart, the GBP/USD pair fell less strongly yesterday than the day before, after which a new growth process began. Now there are two trend lines on the chart - one ascending and the other descending. Thus, the quotes of the pair are between these two lines. However, to determine in which direction traders intend to move the pair, it is necessary to fix above or below one of the lines. In the first case, traders can count on growth in the direction of the corrective level of 200.0% (1.3499). In the second - for a fall in the direction of the corrective level of 127.2% (1.3264). Although almost every day there are new messages on Brexit-related issues, it is still very difficult to understand at what stage the negotiations between Michel Barnier and David Frost are, and also what are the chances of an agreement being concluded before December 31. Today, the chief negotiator from the EU, Michel Barnier, is to submit a report to the ambassadors of all 27 countries to the EU, in which he sets out the current state of the negotiations. Thus, traders can get very important information today. The latest information said that London and Brussels were already discussing only one issue - the issue of fishing. Does this mean that all other issues (fair competition, government support, dispute resolution, compliance with EU norms and rules) have already been resolved? Or is it not? A little more than a week remains at the negotiators' disposal to resolve all differences and ratify the deal. Honestly, it's hard to believe, but perhaps today Michel Barnier will be optimistic in his speech and will announce significant progress?
GBP/USD - 4H.
On the 4-hour chart, the GBP/USD pair rebounded from the Fibo level of 100.0% (1.3481) and reversed in favor of the American currency. As a result, the decline in quotes continues towards the corrective level of 76.4% (1.3291). None of the indicators have any emerging divergences. Fixing the pair above the level of 100.0% will work in favor of the EU currency and resumed growth in the direction of the corrective level of 127.2% (1.3701).
GBP/USD - Daily.
On the daily chart, the quotes of the pair fixed below the corrective level of 100.0% (1.3513), which now increases the likelihood of a new fall with a target of the Fib level of 76.4% (1.3016).
GBP/USD - Weekly.
On the weekly chart, the pound/dollar pair has completed the rally towards the second downward trend line. A rebound from it in the long term will mean a reversal in favor of the US dollar and a prolonged drop in British quotes.
Overview of fundamentals:
On Tuesday, the UK and the US released third-quarter GDP reports and each exceeded traders' expectations. British accounted for + 16.0% q/q, American + 33.4% q/q. Thus, the British and the Americans were alternately receiving little support from traders.
News calendar for USA and UK:
US - changes in the volume of orders for durable goods (13:30 GMT).
US - number of initial and repeated claims for unemployment benefits (13:30 GMT).
On December 23, the calendar of economic events in the UK is empty, and in America, there will be a lot of reports, but the most important of them are those presented above.
COT (Commitments of Traders) report:
The latest COT report showed that speculators were getting rid of both long and short contracts. This again suggests that traders are afraid of the Briton and the information background that exists now. It is extremely difficult to predict what will happen to the UK economy in 2021. Therefore, the category of traders "Non-commercial" prefers to close deals rather than open new ones. This time, speculators have closed 4 thousand long contracts and 2.5 thousand short contracts. Thus, the mood of speculators has become much less bullish. At the same time, the Briton continued the growth process, thus, I can draw the same conclusion as for the euro currency. Major traders are preparing for a new fall in the pound sterling.
Forecast for GBP/USD and recommendations for traders:
I recommend buying the British when the quotes are fixed above the downward trend line on the hourly chart with the target of 1.3499. I recommend selling the pound sterling when it consolidates below the upward trend line on the hourly chart with the target of 1.3264.
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 to obtain speculative profits, but to support current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.
