GBP/USD – 1H.
According to the hourly chart, the GBP/USD pair rebounded from the corrective level of 23.6% (1.3884) on the small Fibo grid, a reversal in favor of the US currency, and a fall to the level of 38.2% (1.3830) on the senior Fibo grid. Thus, the pound/dollar pair does not show a desire to stand still, and the fall of quotes can be continued in the direction of the next corrective level of 50.0% (1.3776) on the small Fibo grid. Yesterday, I noted that the reaction of traders to important reports on the state of the British economy was relatively weak. However, traders continued to sell the pound during the day, and the pair performed a noticeable drop by the end of the day. Let me remind you that the GDP report for the second quarter turned out to be neutral, as it completely coincided with the expectations of traders. But the report on industrial production for June disappointed, amounting to -0.7% m/m, although traders expected to see +0.3% m/m.
Thus, the pound fell yesterday for a reason. But will it continue its decline today, when there will be no important reports in either Britain or the US? If you look at the pair's movement over the past couple of weeks, it becomes clear that there is no question of any strong trend now. After almost every fall, a slightly less strong correction follows. Thus, I believe that today the pair will continue to fall in the direction of the corrective level of 50.0% (1.3776), or it will perform a reversal in favor of the British dollar and rise to the levels of 1.3850-1.3860. The information background is not even of an economic nature. Thus, it is unlikely to help the British or Americans. Traders show their complete disinterest in the news related to the coronavirus or the events in the US Congress, where the bill on infrastructure investment was approved.
GBP/USD – 4H.
The GBP/USD pair on the 4-hour chart performed a reversal in favor of the US currency yesterday and fell below the level of 38.2% on the small Fibo grid. Thus, the fall in quotes can be continued toward the next corrective level of 23.6% (1.3729) on the small Fibo grid. There are no emerging divergences in any indicator today.
News calendar for the USA and the UK:
US - consumer sentiment index from the University of Michigan (14:00 UTC).
On Friday, the calendar of economic events in the UK does not contain any interesting entries. In the US, a passing report on consumer sentiment will be released. I believe that there will be no information background today unless something unexpected and unplanned happens.
COT (Commitments of Traders) report:
The latest COT report on August 3 for the British showed that the mood of major players changed to "bullish," as speculators opened 3,370 long contracts and closed 3,735 short contracts in the reporting week. Thus, the total number of long contracts on their hands again exceeds the total number of short contracts. Such a change in the mood of the "Non-commercial" category of traders may mean that major players are not ready for further sales of the British dollar. If so, then the British currency may begin to be in demand again among speculators. I also want to note that the total number of long and short contracts for all traders is now almost the same. Therefore, bull traders still do not have a strong advantage yet.
GBP/USD forecast and recommendations for traders:
Today, I recommend buying the pair if there is a rebound from the level of 1.3776 on the hourly chart with a target of 1.3825. I recommend leaving sterling sales open today with the targets of 1.3776 and 1.3731 since the closing has already been completed under the level of 1.3825 on the hourly chart.
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 ensure current activities or export-import operations.
"Non-reportable positions" are small traders who do not have a significant impact on the price.
