GBP/USD – 1H.
According to the hourly chart, the quotes of the GBP/USD pair continue to grow. The upward trend line at this time characterizes the mood of traders as "bullish", however, the pair's quotes have already moved quite far away from it. This suggests that the "bullish" mood is increasing. Thus, the British pound is again in high demand in the market, despite the fact that there is almost no positive news from the UK itself. Let me remind you that the latest economic reports were extremely weak, especially with regard to GDP. However, traders believe that things are even worse in America. At the same time, the seventh round of negotiations on a post-Brexit deal between the EU and Britain started in Brussels. In London, they still believe that a deal can be reached. However, let me remind you that, according to Michel Barnier, London is not too eager to conclude an agreement. According to Barnier, London does not want to give in to the most pressing issues, such as fishing in British waters and competition between British and European companies. Thus, there are very few prerequisites for the next round of negotiations to end in progress.
GBP/USD – 4H.
On the 4-hour chart, the GBP/USD pair made a consolidation above the corrective level of 161.8% (1.1357), which now allows us to expect continued growth in the direction of the next corrective level of 200.0% (1.3370). There are no emerging divergences today. The rebound of the pair's quotes from the level of 200.0% will allow us to expect a reversal in favor of the US dollar and a slight fall in the direction of the Fibo level of 161.8% (1.3157).
GBP/USD – Daily.
On the daily chart, the pair's quotes secured above the corrective level of 100.0% (1.3199), which now allows us to continue the growth process in the direction of the next Fibo level of 127.2% (1.3684).
GBP/USD – Weekly.
On the weekly chart, the pound/dollar pair performed an increase to the lower downward trend line. A pullback from this line may allow the pair to perform a reversal in favor of the US dollar and resume the process of falling towards the approximately 1.1500 level. This is a long-term perspective.
Overview of fundamentals:
On Tuesday, the economic news calendars were empty in the UK and America, however, this did not prevent traders from actively trading, which led to a strong growth in the British pound.
News calendar for the US and UK:
UK - consumer price index (06:00 GMT).
US - publication of the minutes of the Fed meeting (18:00 GMT).
On August 19, the information background will not be strong, however, from the very morning, the British pound received support from the report on inflation in Britain, which increased by the end of July to 1.0% y/y and 0.4% m/m. The main consumer price index was 1.8% y/y. Traders' expectations were much lower.
COT (Commitments of Traders) report:
The latest COT report on the British pound was absolutely predictable. Large speculators continued to increase long-contracts (+2.5 thousand) in the reporting week and got rid of short-contracts (-8.5 thousand). Thus, the "Non-commercial" group continued to believe in the Briton. The total number of buy positions opened by speculators has been growing for three weeks in a row, and the number of short contracts in their hands has been declining for three weeks in a row. At the same time, the total number of open long and short contracts for all groups of traders is already approximately the same - 171 thousand and 175 thousand. At the beginning of the new week, traders are again actively buying the British dollar.
Forecast for GBP/USD and recommendations to traders:
I recommend selling the British pound with the target of 2964, if the closing level is 161.8% (1.3157). Today, I recommend to stay in the purchases of the British currency with the goal of 1.3370, as it was fixed above the level of 161.8% (1.3157).
Terms:
"Non-commercial" - major 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 to ensure current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.
