GBP/USD – 1H.
According to the hourly chart, the quotes of the GBP/USD pair increased to the corrective level of 50.0% (1.3900). The rebound of quotes from this level worked in favor of the US currency and the beginning of a new fall in the direction of the corrective level of 61.8% (1.3820). Closing the pair's rate below the level of 61.8% will work in favor of continuing the fall in the direction of the next Fibo level of 76.4% (1.3721). The British currency is also affected by the growth of US 10-year bond yields. However, other factors are also important. The British pound has been growing for a very long time and very strongly. Thus, now bull traders need to find very good reasons to buy the pound again. There are no such reasons now. But traders have enough reasons to sell the pound. These reasons were there before, but now this list is beginning to be replenished with more and more new ones.
At the beginning of 2021, there were several conflicts on the border between Northern Ireland and Ireland. The problem is that the protocol on the Northern Ireland border is not perfect and allows the parties to almost unilaterally make decisions based on very vague points of this treaty. First, the EU strengthened customs controls at the border to stop the illegal export of vaccines to the UK. Then London announced the extension of the grace period for customs at the border with the European Union. At the same time, discontent with the current circumstances is brewing on the island of Ireland itself. Adding fuel to the fire regularly is Scotland, which is determined to leave the UK and will continue to seek permission to hold an independence referendum.
GBP/USD – 4H.
On the 4-hour chart, the GBP/USD pair performed a fall to the ascending trend line, a rebound from it, a small increase, and a return to this trend line. The bearish divergence of the CCI indicator allowed the pair to once again perform a reversal in favor of the US currency. Closing below the trend line will increase the chances of the pair continuing to fall in the direction of the corrective level of 127.2% (1.3701).
GBP/USD – Daily.
On the daily chart, the pair's quotes continue the process of falling in the direction of its ascending trend line. In the long term, the "bullish" mood of traders is still preserved.
GBP/USD – Weekly.
On the weekly chart, the pound-dollar pair completed a close over the second downtrend line. Thus, the chances of long-term growth of the pound are significantly increased.
Overview of fundamentals:
Bank of England board member Andy Haldane was interviewed in the UK on Tuesday. However, there was nothing important or interesting in his speech.
News calendar for the United States and the United Kingdom:
US - consumer price index (13:30 GMT).
No major economic events are scheduled in the UK today. Thus, the information background will be weak, as one important report will still be released in the US - on inflation.
COT (Commitments of Traders) report:
The latest COT report from March 2 on the British was quite interesting. The most important thing to note is the change in the mood of speculators for the reporting week in the opposite direction if compared with the report on the euro. The mood of euro traders became more "bearish". According to the British, the mood of speculators became more "bullish". This is a very significant difference, which perhaps explains the fact that the euro currency has been falling for 2 months, and the pound sterling has been falling for only two weeks. The number of contracts focused on the hands of the "Non-commercial" category of traders, as a whole, decreased by 11 thousand. But long contracts were reduced by 2.6 thousand, and short contracts - by 8.2 thousand. Thus, major traders can still count on the growth of the British dollar quotes.
GBP/USD forecast and recommendations for traders:
I recommend buying the British dollar in case of a rebound from the trend line on the 4-hour chart with targets of 1.3900 and 1.3980. It is recommended to sell the pound today if a close is made under the trend line on the 4-hour chart with targets of 1.3721 and 1.3625. However, at the moment, neither a clear rebound nor a clear close under the trend line has occurred.
Terms:
"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.
"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy foreign currency, not for speculative profit, but to support current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.
