According to the hourly chart, the GBP/USD pair also reversed in favor of the US dollar on Tuesday. They began falling towards the corrective level of 523.6% (1.2146) and the lower line of the ascending trend corridor, which continues to characterize the mood of traders as "bullish." The rebound of quotes from the level of 1.2146 will favor resuming the growth of the British dollar in the direction of the level of 1.2315. Fixing the pair's rate under the trend corridor will increase the likelihood of a further fall of the pound in the direction of the 1.1933 level. The information background for the pound/dollar pair is also quite poor on Monday and Tuesday. One index of business activity in the manufacturing sector of the UK and two similar indices in the USA were released. However, yesterday and today, the pound fell under some other factors. And most likely, these factors are exclusively graphic. We have an upward channel, and the pair is not obliged to move along their center upwards. On the contrary, it has shown how it will move in recent weeks: strong growth - correction.
Thus, now we can see one of these corrections, after which we should expect new strong growth. The pound sterling now looks more confident than the European currency, but let me remind you that this Thursday, traders will closely monitor the rhetoric of the Bank of England and the decisions it has made. Traders expect a 0.50% rate increase and hear statements about the beginning of a balance reduction program. These two decisions will be "hawkish" and may cause new growth for the British. There is also another possible option. After all, the pound has been growing for quite a long time, and the probability of its further growth decreases daily. Traders may have already considered the Bank of England rate increase in the current rate of the pair. But in any case, there is a trend corridor, so the beginning of the fall of the pound sterling can be determined by the closing of the quotes of the pair below it.
On the 4-hour chart, the pair increased to the corrective level of 127.2% (1.2250) and anchored above the descending trend line. However, after the formation of a "bearish" divergence, the CCI indicator turned in favor of the US dollar and began to fall. And working out the level of 1.2250 can now be considered a rebound from this level. Thus, the British can start a strong fall today. And traders will be able to count on further growth after the quotes are fixed above the Fibo level of 127.2%.
Commitments of Traders (COT) Report:
The mood of the "Non-commercial" category of traders has become a little less "bearish" over the past week. The number of long contracts in the hands of speculators increased by 2,663 units, and the number of short contracts decreased by 597. Thus, the general mood of the major players remained the same – "bearish," and the number of short contracts still exceeded the number of long contracts by several times. Major players continue to get rid of the pound for the most part, and their mood has not changed much lately. The pound itself has been showing growth in recent weeks, but COT reports make it clear that the Briton may resume its decline over the next few weeks, as the positions of bull traders are in no hurry to improve enough to count on an upward trend.
News calendar for the USA and the UK:
On Tuesday, the calendars of economic events in the UK and the US do not contain a single interesting entry. Thus, the influence of the information background on the mood of traders today will be absent.
GBP/USD forecast and recommendations to traders:
I recommend new sales of the British when anchoring under the ascending corridor on the hourly chart with a target of 1.1933. It is also possible to sell at the rebound from the level of 1.2250 on the 4-hour chart. I recommend buying the British when rebounding from the bottom line of the ascending corridor on the hourly chart with a target of 1.2315.
