GBP/USD – 1H.
Good day, dear traders! On the hour chart, the GBP/USD pair continued to fall on Monday and stopped only near the level of 1.3640. The pair reversed in favor of the pound, and the rise to the correction level of 1.3692 (23.6%) started. Fixing quotes above this Fibo level allows traders to expect further growth to 1.3731 and 1.3747. The quotes rebound from the Fibo level 23.6% will result in USD gains and recommence the fall to the correctional levels of 1.3602 and 1.3572. Yesterday, there was no informational background for both the GBP/USD and the EUR/USD pairs. However, the latter demonstrated low activity for the whole day, while the British pound was actively falling. Notably, this week two meetings of the central banks, the Fed and the Bank of England, are due. Thus, this week is highly significant for the GBP/USD pair. We should not mention what decisions both banks may take. It is better to wait for the official statements instead of making forecasts.
However, one fact is undeniable. At the moment, dealers are trading, considering possible results of both meetings. USD grew last week, indicating that traders expect Fed's hawkish rhetoric. However, things may change tomorrow when the Fed announces its decisions on the bond buying program in the evening. On Thursday, the Bank of England may consolidate its success. Looking ahead, at the moment a narrowing triangle has been formed on the daily chart. Therefore, the further movement will take place, depending which of its lines traders will manage to break down. Now, the pair's quotes are near the bottom of the triangle. Consequently, closing under the triangle may increase the probability of further decline in the direction of 1.3513 (in the long term).
GBP/USD - 4H.
The GBP/USD pair fell to the correction level 38.2% at 1.3642 on the 4h chart. The quotes' rebound from this level favored the British currency and started growing to the nearest Fibo level of 1.3690 (23.6%). Fixing quotes above the level of 1.3690 will allow traders to expect further rise to the levels of 1.3746 and 1.3791. No impending divergences are observed in the indicators today.
US and UK news Calendar:
The UK and US economic event calendars do not demonstrate any interesting entries on Tuesday. However, dealers may trade the pair very actively this week, as the Fed and the Bank of England's meetings will take place on Wednesday and Thursday. Traders have already demonstrated their activity on Monday. Consequently, there is no information background today, but it will be very strong tomorrow.
COT report (Commitments of traders):
The latest COT report (September 14, 2021) on the British currency showed that the mood of major players has become more bullish. During the reporting week speculators opened 14796 long contracts and closed 14,426 short contracts. Thus, the balance between bulls and bears has changed dramatically. Now the bulls have more contracts, 45673, while bears have 39296 contracts. However, a week ago the situation was the opposite. Despite the fall of the British currency quotes last week, its chances for growth increased sharply after the last COT report. Notably, "commercial" traders sold 66 thousand of long contracts and 33 thousand of short contracts. In other words, the total number of contracts has decreased by one third during the week.
GBP/USD forecast and recommendations for traders:
Yesterday, I recommended buying the pound, in case the price rebounded from 1.3692 on the H1 chart. The rebound was completed from 1.3642 level. Besides, it is a good signal for buying. Now it is recommended to keep open buy orders with the targets 1.3692, 1.3731 and 1.3747. I suggest opening sales in case the price rebounds from the level of 1.3692 or 1.3731, with the targets 1.3692 and 1.3642.
TERMS:
"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.
"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy currency not for speculative profit, but for ensuring current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant influence on the price.
