GBP/USD – 1H
Hello, dear traders! On the H1 chart, GBP/USD rose to the 23.6% retracement level of 1.3731 and went down. Consolidation will help the quote to increase to 50.0% and 38.2% retracement levels of 1.3776 and 1.3825 respectively. Yesterday, it became clear that bulls are not ready to buy out the pound sterling. Nobody is prepared to take a risk ahead of Jerome Powell's speech on Friday because hardly anyone knows what the Fed's chair is going to say. That is why traders are likely to skate on thin ice until Friday. Moreover, the UK's macroeconomic calendar will be empty until the end of the week. There has been no news about Brexit or the EU-UK relationship.
Neither Boris Johnson nor Ursula von der Leyen has made any comments. Nothing interested happened in Scotland where the government is planning to hold a referendum on independence from the UK in the next 18 months. The Afghanistan crisis has been the only widely discussed news so far. Yesterday, during a virtual press conference, the G7 members agreed that all Afghanistan residents who do not agree with the Taliban regime should have the right to leave the country. The evacuation from Kabul continues. People are ready to fly anywhere. They do not want to live under the Taliban regime. The evacuation will officially end on August 31. Clearly, not everyone willing to flee the country will be able to do so before the evacuation ends.
GBP/USD – 4H
On the H4 chart, GBP/USD increased to the 23.6% retracement level of 1.3729 after the formation of a bullish CCI divergence. The price may reverse from this level and go down to the 38.2% retracement level of 1.3642. A new bearish divergence also indicates the possibility of a reversal. At the same time, if the price closes above 1.3729, the quote may rise to the 38.2% retracement level of 1.3829.
UK and US macroeconomic calendar:
The report on durable goods orders is scheduled for release in the United States. However, the market is likely to ignore the data. The macroeconomic calendar in the United Kingdom is empty on Wednesday.
Commitments of Traders (COT) report:
The latest COT report as of August 17, revealed a decrease in bullish sentiment. In the previous week, speculators closed 2,718 long positions and 312 short ones. Speculators are now holding more long positions than short ones. At the same time, the gap between long and short positions is very small. As for other categories of traders, the situation is the same. This means that the market is neither bullish nor bearish.
Outlook for GBP/USD:
Traders should consider entering long positions if the price closes above 1.3731 with targets at 1.3776 and 1.3825. Short positions should be considered if the quote goes down from 1.3731 with the target at 1.3668.
TERMS:
Non-commercial traders are large market players: banks, hedge funds, investment funds, private, and large investors.
Commercial traders are commercial enterprises, firms, banks, corporations, and companies that buy currency not to obtain speculative profit, but to ensure current activities or export-import transactions.
Non-reportable positions are small traders who do not have a significant impact on the price.
