GBP/USD – 1H.
Hello, dear traders! On the hourly chart on Friday, the GBP/USD pair rebounded from the upper boundary of the downward trading channel, and also from the correction level of 127.2% - 1.3296, reversed in favor of USD and started falling down again towards the correction level of 161.8% - 1.3150. The price has already rebounded from the upper boundary of the trading channel four times, each time slightly declining, and bears failed to retest the low of November 30. Thus, bulls are likely to make a successful attempt to fix the price above the trading channel. This consolidation may allow us to expect the pair to climb towards the Fibo level of 100.0% - 1.3411. On Friday, economic data on the pound was quite weak, as there were no important news and events in the UK. Traders had to analyze only the US data, which showed a strong report on unemployment claims and a weak Nonfarm Payrolls report.
However, there were a few other reports. Average US payrolls rose by 0.3% in November, which matched traders' expectations. The ISM Services PMI rose to 69.1 against much lower expectations. The growth of the dollar on Friday was quite predictable. USD climbed against the pound, but not against the euro, which was odd. However, now we should wait for future events and reports. There will be a lot of important data in the UK on Friday. Traders expect the GDP and industrial production reports. Although, more attention will be paid to the US inflation, which will be released on Friday, too. Traders will also keep an eye on the situation with Omicron around the world and the progress of the negotiations between London and Brussels. The Bank of England and Fed meetings are closely watched.
GBP/USD – 4H.
On the 4-hour chart, the pair finally closed the trading day under the correctional level of 61.8% at 1.3274, which allows a slight downward movement. However, there is already a bullish divergence in the MACD indicator, which may lead to a rise in the pair. However, there is an upper boundary of the downward trading channel, which confirms the traders' bearish sentiment. Thus, if the price closes above the channel may bring gains to GBP and increase the probability of its growth towards the correction level of 50.0% - 1.3457.
The US and the UK economic calendar:
The UK - Construction PMI (09-30 UTC).
On Monday, the only report of the day was released. The UK Construction PMI exceeded traders' expectations by reaching 55.5, which allowed GBP to rise in the morning. However, other economic data is unlikely to influence the market for the rest of the day.
The COT (Commitments of Traders) report:
The recent COT report of November 30 showed that the sentiment of big market players has become more bearish. This trend has been observed for the fifth week in a row. Traders opened 1,347 long and 6,398 short positions during the reporting week. Altogether over the last month, traders opened about 56,000 short positions, which is more than all long positions in the market now. Thus, in recent weeks traders have been showing strong bearish sentiment, which means that the pair is likely to continue the downtrend. The graphical analysis proves this because the pound does not rush to increase. The total number of open long and short positions in all categories of traders is almost the same now.
Forecast for the GBP/USD pair and trading recommendations:
Traders may open long positions with the targets at 1.3411 and 1.357 if the price closes above the trading channel on the 4-hour chart. Opening short positions are recommended if the price closes below 1.3274 with the target at 1.3150. However, the bullish divergence canceled this signal.
TERMINOLOGY:
"Non-commercial" - large market players: banks, hedge funds, investment funds, private, and large investors.
"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy currency, not for speculative profit, but to support current operations or export-import operations.
"Non-reportable positions" - small traders who have no significant influence on the price.
