GBP/USD – 1H.
According to the hourly chart, the GBP/USD pair quotes continue to trade in different directions. Thus, it is impossible to draw any more or less accurate conclusions about the prospects of the pair. I think that the most informative is the 4-hour chart that shows the side corridor formed in recent weeks very clearly. The UK is in complete chaos right now. I have already mentioned about the coronavirus in this country. There are 14-15 thousand new cases of infection every day, which was not even at the peak of the first "wave" of the pandemic. In addition, the country remains involved in negotiations in a trade deal with the European Union, which were officially extended until November 15. Both negotiating groups continue to discuss all contentious issues, however, there is no official information on progress. More precisely, the opposite is true. Both Michel Barnier, Ursula von der Leyen, and David Frost regularly state that there is either no progress or minimal progress. It is not known at what stage the negotiations are in general, and how much the parties still have to meet each other halfway. Thus, a huge number of rumors are generated from here. Some believe that the deal will be concluded in early-mid-November, others believe that further negotiations do not make sense and the parties will not be able to reach a consensus. The Briton does not respond to all this unconfirmed information and is waiting for official information. Either the negotiations have completely failed or a trade deal has been concluded. Traders are not inspired by information like "the deal is agreed at 37.17%".
GBP/USD – 4H.
On the 4-hour chart, the GBP/USD pair fell to the corrective level of 50.0% (1.2867), rebounded from it, and turned in favor of the British pound. Thus, the growth process can be continued in the direction of the Fibo level of 38.2% (1.3010). At the same time, trading continues between the levels of 1.2720 and 1.3010. This is the side of the corridor, which we mentioned above. If it is approximately 200-250 points for the euro, then it is 300 points for the British. The rebound of quotes from the level of 1.3010 will work in favor of the US currency and some fall.
GBP/USD – Daily.
On the daily chart, the pair's quotes performed a rebound from the corrective level of 61.8% (1.2709) and an increase to the Fibo level of 76.4% (1.3016). Near this level, a reversal was made in favor of the US currency and the process of falling towards the corrective level of 61.8% began.
GBP/USD – Weekly.
On the weekly chart, the pound/dollar pair closed under the lower downward trend line, thus, a false breakout of this line followed earlier. The pair returns to a downward trend.
Overview of fundamentals:
There was no major news in the UK on Thursday, other than those related to the coronavirus epidemic. In the US, the situation is approximately the same news.
Calendar for the US and the UK:
UK - change in GDP (06:00 GMT).
UK - change in industrial production (06:00 GMT).
On October 9, the US calendar is empty again. In the UK, there will be quite important reports on GDP and industrial production that can attract the attention of traders.
COT (Commitments of Traders) report:
The latest COT report on the British pound that was released last Friday showed a sharp increase in the number of short contracts in the "Non-commercial" category. This means that this group of traders believes that the British pound will continue to fall, although it has been growing in recent days. Now the total number of short contracts focused on the hands of speculators exceeds the total number of long contracts. Thus, we can conclude that major traders are again changing their mood to "bearish". In total, during the reporting week, all categories of traders opened approximately the same number of contracts.
Forecast for GBP/USD and recommendations for traders:
Today, I recommend buying the GBP/USD pair with a target of 1.3010, as the rebound from the corrective level of 50.0% (1.2867) was made on the 4-hour chart. Fixing quotes below the level of 50.0% will allow you to open sales with a target of 1.2720.
Terms:
"Non-commercial" - large 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 current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.
