GBP/USD – 1H.
According to the hourly chart, the GBP/USD pair performed a strong fall to the corrective level of 23.6% (1.3731) yesterday. The rebound of quotes from this level allows traders to count on a reversal in favor of the UK currency and some growth in the direction of the corrective levels of 50.0% (1.3776) and 38.2% (1.3825) on the small Fibo grid. Closing the pair's exchange rate at the level of 23.6% will work in favor of continuing the fall of quotes in the direction of the Fibo level of 76.4% (1.3668). As I said in yesterday's article on the British, the information background was quite strong on August 17. Thus, traders ignored these strong data on unemployment, applications for unemployment benefits, and wages. It further assures me that at this time, it is not economic reports that affect the movement of the pair and the mood of traders. Only the situation in Afghanistan can be the reason for such a sharp increase in the US currency. Separately, I would like to note that last night there was a speech by Jerome Powell, who did not say anything important in his speech. Therefore, the traders did not respond to his speech with any trading actions. However, it should be noted that the Fed president drew attention to the coronavirus factor, which does not let go of humanity and may again harm the US economy. According to him, people and businesses need to learn to live together with the virus without resorting to lockdowns, strict quarantines, and so on. He also noted that he cannot yet say whether the increase in cases of COVID is affecting the American economy at this time. Just at this very time, a new inflation report for July was released in the UK. However, despite its importance, traders may well not pay due attention to it, as they did yesterday to the reports on unemployment and wages.
GBP/USD – 4H.
The GBP/USD pair on the 4-hour chart performed a drop to the corrective level of 23.6% (1.3730) on the small Fibo grid. Closing quotes below this level will allow us to count on the continuation of the fall toward the next corrective level of 38.2% (1.3642) on the senior Fibo grid. The rebound will allow us to expect a reversal in favor of the British and some growth in the direction of the corrective level of 38.2% (1.3829). No indicator has any emerging divergences today.
News calendar for the United States and the United Kingdom:
UK - consumer price index (06:00 UTC).
US - publication of the minutes of the Fed meeting (18:00 UTC).
On Wednesday, an inflation report will be released in the UK in the next few minutes, and in the US, the FOMC protocol will be published late in the evening. In general, the information background today may affect the mood of traders and the movement of the pound/dollar pair. However, it is unlikely to be strong.
COT (Commitments of Traders) report:
The latest COT report from August 10 on the British dollar showed that the mood of major players has changed to "bullish" and is now strengthening, as speculators closed 1,872 long contracts and 5,480 short contracts in the reporting week. Thus, the total number of long contracts on their hands exceeds the number of short contracts, and the gap between the categories increases. 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. The British currency has already begun to be in demand again among speculators. However, the bulls still do not have a strong advantage since the "Non-commercial" group has only 6 thousand more long contracts than short.
GBP/USD forecast and recommendations for traders:
Today, I recommend buying the pair if there is a rebound from 1.3731 on the hourly chart with targets of 1.3776 and 1.3825. I recommend a new sale of the pound with a target of 1.3668 if a close is made under the level of 1.3731 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" - small traders who do not have a significant impact on the price.
