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08.04.2020 09:44 AM
GBP/USD. April 8. COT report: both hedgers and speculators are getting rid of the pound. Long contracts are closed in large volumes

GBP/USD – 1H.

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Hello, traders! According to the hourly chart, the GBP/USD pair performed a reversal in favor of the British dollar and anchored above the weak downward trend line. Thus, the weak "bearish" mood was replaced by an equally weak "bullish" one, because, as we can see, the pair's quotes do not tend to grow very much. Moreover, at the beginning of the European session, there is even a slight drop. Based on this, I recommend that you refer to the older charts at this time to get the necessary information. The hourly chart is currently uninformative. From the main news of the past day, I highlight reports that British Prime Minister Boris Johnson, according to members of the government, is not connected to a ventilator, although he is in the intensive care unit, and he has not been diagnosed with pneumonia. Thus, Johnson's life is now in no danger.

GBP/USD – 4H.

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On the 4-hour chart, the GBP/USD pair performed a reversal in favor of the English currency after the formation of a bullish divergence in the CCI indicator and anchored above the corrective level of 50.0% (1.2303). Thus, the growth process can be continued on April 8 in the direction of the next Fibo level of 61.8% (1.2516). However, trading in recent days is unclear, bull and bear traders can not decide who has the initiative in their hands. Thus, fixing the pair's exchange rate under the correction level of 50.0% will work in favor of the US dollar and resume the fall in the direction of the Fibo level of 38.2% (1.2095). New emerging divergences are not observed in any indicator today.

GBP/USD – Daily.

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The daily chart shows a new grid of Fibo levels from the peak on December 13 and low on March 20. According to this grid, the pair's quotes first performed a rebound from the Fibo level of 50.0% (1.2463), a fall to the corrective level of 38.2% (1.2215), and a rebound from this level with a reversal in favor of the British currency. Thus, in the coming days, we can expect the pair to continue growing in the direction of the Fibo level of 50.0%. Closing the pair's rate at 38.2% will work in favor of the US dollar and significantly increase the probability of further falls.

GBP/USD – Weekly.

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On the weekly chart, the pound/dollar pair performed a false break of the lower trend line. Thus, before the pair's quotes are fixed under this line, there is a high probability of growth in the direction of the two upper trend lines.

Overview of fundamentals:

No economic reports were released in the UK and the US on Tuesday. All the news related to new cases of COVID-2019 virus, as well as the hospitalization of Prime Minister Boris Johnson, had no effect on the mood of traders.

The economic calendar for the US and the UK:

As of April 8, the UK and US news calendar does not contain any important reports. Only publication of the minutes of the Fed meeting at 20:00 GMT. Thus, today during the day, traders will again have nothing to pay attention to.

COT (Commitments of Traders) report:

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On Friday, a new COT report was released and it again showed a reduction in the total number of contracts in the hands of major market players. Long positions lost 15,000, and short positions - 14,000. Thus, the British pound continues to lose interest from major players. Speculators also continue to reject contracts for the British pound, reducing both long (-10,646) and short (-5,653). A larger number of contracts, therefore, are in the hands of hedgers, who usually trade against the main trend, trying to protect themselves from future price changes. In general, we can say that long contracts continue to be reset at a higher rate than short. And this factor can return the pound to a fall in the coming weeks.

Forecast for GBP/USD and recommendations to traders:

I believe that today we should consider selling the British dollar with a target of 1.2095. However, to do this, you need to get a signal about closing quotes on the 4-hour chart at the level of 50.0% (1.2303). Purchases are still considered impractical, despite the closing above the trend line and the level of 50.0%.

Terms:

"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.

"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy currency to ensure current activities or export-import operations.

"Non-reportable positions" - small traders who do not have a significant impact on the price.

Samir Klishi,
Especialista em análise na InstaForex
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