GBP/USD – 1H.
According to the hourly chart, the GBP/USD pair increased to the corrective level of 23.6% (1.3731), a rebound, and a minimal drop yesterday. However, the pair has already broken through this level this morning and can close above it. This consolidation will allow us to expect continued growth of quotes in the Fibo levels of 50.0% (1.3776) and 38.2% (1.3825) on the small Fibo grid. Also, yesterday, the pair's quotes performed a close over the descending trend line, which changed the mood of traders to bullish. There was an information background on Monday. However, traders paid almost no attention to it.
Given that the British dollar has been growing all day, and the American dollar has been falling, it can hardly be said that traders have worked out business activity indices, which both in the US and in the UK were below traders' expectations. Today, no news and events are expected at all. Nevertheless, traders have been showing that they are ready to continue buying the British.
Perhaps such a sharp change of mood was caused by the fact that the number of coronavirus diseases is growing in America, which significantly reduces the likelihood of completing the QE program in the near future. However, I want to remind you that people in the UK continue to get sick. Thus, the pound only temporarily seized the initiative. If you look at the 4-hour chart, the pair's movement is very much like a roller coaster between the levels of 1.3600 and 1.4240. The course may be now taken at 1.4240, and all the reasons that we are trying to find now are just the background, which does not have a serious impact on the pair's movement. This week, only Jerome Powell's speech on Friday can be considered a significant event that can significantly affect the dollar's prospects. But it is still three days away.
GBP/USD – 4H.
The GBP/USD pair on the 4-hour chart reversed the British currency after the formation of a bullish divergence at the CCI indicator and continued the growth process. The rebound of quotes from the level of 23.6% (1.3729) will allow us to count on a reversal in favor of the US currency and a slight fall in the direction of the level of 38.2% (1.3642). The new bearish divergence also allows us to expect a reversal in favor of the American. However, closing above the level of 23.6% will increase the chances of further growth in the direction of the corrective level of 38.2% (1.3829) on the small Fibo grid.
News calendar for the US and the UK:
On Tuesday, the calendars of economic events in the UK and the US are empty. Thus, the influence of the information background on traders today will be absent. Nevertheless, the pound can continue its growth.
COT (Commitments of Traders) report:
The latest COT report dated August 17 for the British dollar showed that the mood of major players is again "bullish" but again weakened, as speculators closed 2,718 long and 312 short contracts in the reporting week. Thus, the total number of long contracts in the hands of speculators exceeds the total number of short contracts. However, this advantage is very weak. Instead, we can conclude that the number of long and short contracts is almost the same. The same can be said for other categories of traders since the total number of long and short contracts is almost the same.
GBP/USD forecast and recommendations for traders:
Today, I recommend buying the pair if the hourly chart closes above the level of 1.3731 with targets of 1.3776 and 1.3825. I recommend selling the pound with a target of 1.3668 if there is a rebound from 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" are small traders who do not have a significant impact on the price.
