GBP/USD – 1H.
According to the hourly chart, the GBP/USD pair continued the growth process the day before. Moreover, by the end of the day, it reached the levels of 1.3830 and 1.3837 and performed the closure on both. Thus, the growth process can now be continued toward the next corrective level of 76.4% (1.3892) on the small Fibo grid. Fixing the pair's exchange rate below the level of 1.3830 will allow us to expect a slight drop in the direction of the trend line, which continues to characterize the traders' mood as bullish at this time. But, as I have already said, a lot will depend on economic statistics, especially in the US labor market. In the second half of the day, the US dollar may add or fall a lot, depending on the actual value of the Nonfarm Payrolls report.
The Fed's monetary policy is now tied to the state of the labor market. Moreover, it is attached both in the minds of traders and in the regulator itself. Jerome Powell has repeatedly stated that restoring the labor market to pre-crisis levels is the Central Bank's main goal. Therefore, it is reasonable to assume that the Fed will not curtail the asset purchase program until the labor market indicators begin to approach these pre-crisis levels. The US dollar will not receive the necessary support from traders. Thus, a lot depends on the state of the labor market in August, after the two strongest summer months. Already on September 22, the FOMC will hold a regular meeting, at which it will have to announce decisions on the QE program. It will not be possible to drag out time further. Markets are demanding concrete answers to the question: when will the Fed begin to reduce economic stimulus? And the Fed is going first to analyze the impact of the latest surge in coronavirus infections on the economy, as well as the latest reports on inflation and the labor market before the meeting.
GBP/USD – 4H.
The GBP/USD pair performed a new reversal in favor of the British currency on the 4-hour chart after rebounding from the corrective level of 23.6% (1.3730) on the small Fibo grid. Thus, the growth process can be continued in the direction of the levels of 1.3870 and 1.3890. A rebound from the level of 1.3870 will allow us to count on a reversal in favor of the US currency and a slight fall in the direction of the corrective level of 38.2% (1.3745) on the small Fibo grid. There are no emerging divergences in any indicator today.
News calendar for the United States and the United Kingdom:
UK - PMI index for the service sector (08:30 UTC).
US - unemployment rate (12:30 UTC).
US - change in the number of people employed in the non-agricultural sector (12:30 UTC).
US - change in the average hourly wage (12:30 UTC).
US - ISM index of business activity in the service sector (14:00 UTC).
On Friday in the UK, the calendar of economic events contains only a report on business activity in the services sector, which is unlikely to cause a strong reaction from traders. In America, much more significant reports will be released today.
COT (Commitments of Traders) report:
The latest COT report from August 24 on the British showed that the mood of major players had become sharply more "bearish." During the reporting week, speculators closed 2,266 long contracts and immediately opened 18,903 short contracts. Thus, now the total number of long contracts in the hands of speculators is less than the total number of short contracts. In one week, the mood of speculators has changed dramatically. However, can we conclude that the pound will now continue to fall? As I have already said, traders have big problems with closing at 1.3600, and at the moment, the British dollar's quotes continue to grow. The further fall of the British is not guaranteed.
GBP/USD forecast and recommendations for traders:
Today, I recommend buying a pair if bull traders hold the pair on the hourly chart above the level of 1.3830, with a target of 1.3890. I recommend selling the pound with the targets of 1.3792 and the trend line if a close is made under the level of 1.3830 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.
