GBP/USD – 1H
Hello, dear traders!
On the H1 chart, GBP/USD closed below the 127.2% retracement level of 1.3517 and fell to the 161.8% retracement level of 1.3409 by the end of the day. The trend may reverse if the quote rebounds to 1.3517. In case of consolidation below the 161.8% retracement level, the quote may go down to the 200.0% retracement level of 1.3291. Meanwhile, the fuel crisis continues in the UK and the pound keeps falling for that only reason. BoE Governor Bailey, US Treasury Secretary Yellen, and Fed'd Powell delivered speeches this week. However, it is not their fault that GBP has plunged by 300 pips for 2 trading days. The fuel crisis is expected to last at least until Christmas if the government cannot solve the problem shortly.
Gasoline shortage is projected to last until Christmas, even if most drivers stop buying fuel altogether. So far, this acute and thorny problem does not look as if it can be tackled in a couple of days just by involving the military, who will play the role of truck drivers. The UK's problems appeared to be more structural as it turned out 9 months after Brexit. The country is completely lacking waiters, cleaners, builders, and drivers - all those who usually came to the UK to work. Britain is no longer part of the EU. Workers from the Union simply stopped traveling to the UK, since it has become more difficult to obtain a work permit. Moreover, some EU countries also have a high living standard and high earnings. Thus, the UK government has to solve the problem as soon as possible, since the fuel crisis may be followed by a crisis in any other industry.
GBP/USD – H4
On the H4 chart, GBP/USD closed below the 50.0% retracement level of 1.3457. The price is expected to fall to the 61.8% retracement level of 1.3274. In case of consolidation above the 50.0% retracement level, the quote may rise to the 38.2% retracement of 1.3642. Neither of the indicators has formed divergence today.
Macroeconomic calendar:
US - Q2 GDP, weekly jobless claims
US - Federal Reserve Chairman Jerome Powell Speaks, Federal Reserve Chairperson Janet Yellen Speaks
UK - GDP Growth Rate
Commitments of Traders report:
According to the latest COT report as of September 21, the bearish sentiment of major market players increased. This week, speculators opened 7,519 long contracts and 13,107 short contracts. The number of short positions is twice as high. The chart illustrates that the number of long and short positions is in line among all the groups of traders. A week ago, an opposite situation took place. Generally speaking, the pound sterling is unlikely to rise after the COT report. Thus, the market is neither bullish nor bearish.
GBP/USD forecast:
It is wise to open short positions after a rebound from 1.3409 on the H1 chart with the targets at 1.3517 and 1.3601. Right now, it is too risky to open new short positions because the pair has already plunged by 300 pips in a day. Nevertheless, you may consider selling the pair if the quote closes below 1.3409 with the target at 1.3291.
TERMS:
Non-commercial traders are major 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 yield 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.
