GBP/USD – 1H.
According to the hourly chart, the GBP/USD pair continued the process of falling on Friday and did not even notice the corrective level of 23.6% (1.3731) on its way. Thus, the decline in the British dollar's quotes can be continued toward the level of 23.6% (1.3692) on the small Fibo grid. The rebound of quotes from this level will allow us to count on a reversal in favor of the British and some growth in the direction of the levels of 1.3747 and 1.3792. Closing the pair's exchange rate below the level of 1.3692 will increase the chances of continuing the fall in the direction of the corrective level of 0.0% (1.3602). The information background on Friday was more important for the Briton than for the European. In the UK, the retail trade report for August was released. Sales volumes decreased by 0.9% compared to the previous month. Excluding fuel sales – by 1.2% compared to July. Thus, traders had reasons for new sales of the British dollar.
However, last week, there were more important statistics in Britain, which showed the good state of the economies. And this week, the pound will have to go through two serious tests at once. In addition to the Fed meeting, from which traders are waiting for an announcement on the reduction of the economic stimulus program, there will also be a meeting of the Bank of England (on Thursday). Traders are also waiting for any hints from the Bank of England on the possible timing of completing the incentive program. Therefore, on Wednesday and Thursday, the activity of traders can grow significantly. According to the latest COT report, we can see that all categories of traders have begun to close all British dollar positions actively. It means that traders do not know what to expect from the Fed and the Bank of England and exit positions in advance. Both central banks now have only one question: when to expect a reduction in QE programs? It is impossible to predict how everything will end. For example, the Bank of England will publish the vote results on the issue of reducing QE. And even if the number of "yes" votes grows to 2 or 3, this can already support the British very much.
GBP/USD – 4H.
The GBP/USD pair on the 4-hour chart continues the process of falling, having closed under the levels of 38.2% and 23.6% on the small Fibo grid. Thus, the decline in quotes continues now in the direction of the levels of 1.3690 and 1.3642. A rebound from any of them may work in favor of the British and some growth. However, it makes no sense to predict the pair's movement before the two most important meetings of central banks.
News calendar for the USA and the UK:
On Monday, the calendars of economic events in the UK and the US do not contain a single interesting entry. However, this week, traders can trade the pair very actively, as they will have enough reasons to do this. On Monday, there will be no information background. On Wednesday and Thursday, it will be super strong.
COT (Commitments of Traders) report:
The latest COT report on September 14 for the pound showed that the mood of major players has become more "bullish." At the same time, it is much more "bullish." During the reporting week, speculators opened 14,796 long contracts and closed 14,526 short contracts. Thus, the balance of power between bulls and bears has changed dramatically. Now, there are more contracts in the hands of bulls – 45,673, and 39,296 contracts in the hands of bears. Although a week ago the situation was the opposite. Thus, despite the fall in the quotes of the British dollar in the last week, the chances of growth of this currency increased sharply after the latest COT report. I would also like to note that the "Commercial" category of traders got rid of 66 thousand long contacts and 33 thousand short contracts. The total number of contracts on their hands for the week decreased by a third.
GBP/USD forecast and recommendations for traders:
I recommend buying the pound today if there is a rebound from the level of 1.3692 on the hourly chart, with targets of 1.3747 and 1.3792. I recommend continuing selling if the closing is made under the level of 1.3692, with the goals of 1.3642 and 1.3602.
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.
