GBP/USD – 1H.
Hello, traders! On the hourly chart, the quotes of the GBP/USD pair passed through the upward trend line several times during the past day, making it finally not working. Thus, we have only a downward trend line at our disposal, which at this time characterizes the mood of traders as "bearish". However, now the pair's quotes are in the process of growing towards this trend line. The rebound from it will allow you to count on the resumption of the process of falling quotes. The news lull in the UK forces traders to continue to follow only the information flow from the US. Although this judgment applies only to news on Brexit and negotiations, which really have been gone for a long time. But yesterday in the UK, reports on industrial production and gross domestic product were released, which turned out to be less bad than traders expected. However, this does not negate the fact that the British economy fell in the second quarter by the highest value in the last 100 years – 20.4%. However, this is quite an expected figure, given the scale of the pandemic crisis. The British pound was in demand in yesterday's trading, despite strong inflation in America and weak reports from Britain. Thus, traders simply did not pay attention to all the economic reports, as in the case of the euro currency.
GBP/USD – 4H.
On the 4-hour chart, the GBP/USD pair performed a reversal in favor of the EU currency and again tried to return to the corrective level of 161.8% (1.3157). The rebound of the pair's quotes from this level will allow traders to expect a new reversal in favor of the US currency and a resumption of the fall in the direction of the Fibo level of 127.2% (1.2964). The pound is now also in a side corridor, which is limited to the levels of 127.2% and 161.8%. Today, the divergence is not observed in any indicator.
GBP/USD – Daily.
On the daily chart, the pair's quotes performed an increase to the corrective level of 100.0% (1.3199), however, the level of 161.8% on the 4-hour chart stopped the pair's growth. Closing the rate above the 100.0% level will work in favor of further growth in the direction of the 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. The rebound 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 Wednesday, the UK had important reports on industrial production and GDP, as I have already mentioned above, and in the US - a report on inflation. All these reports were not taken into account by traders. The British pound has started the growth process again, despite the weak statistics for itself.
News calendar for the US and UK:
US - number of initial and repeated applications for unemployment benefits (12:30 GMT).
On August 13, the information background will be extremely poor. If traders yesterday ignored three important reports, today there is no chance that the report on applications for unemployment benefits will be played back.
COT (Commitments of Traders) report:
The latest COT report on the pound was again quite unexpected. Let me remind you that in the last two weeks, speculators either got rid of long contracts or opened more short contracts. That is, according to the logic of things, the Briton should have started falling two weeks ago. However, instead, the growth of its quotes continued. A new COT report showed that a group of "Non-commercial" traders has started to re-open long contracts. However, the previous two weeks can't be crossed out just like that. Despite the fact that speculators have again begun to favor the British, I still doubt his prospects. On the other hand, if the information background from America deteriorates, the fall of the dollar may well resume.
Forecast for GBP/USD and recommendations to traders:
I recommend selling the pound with a target of 1.2964, if a new rebound is made from the level of 161.8% (1.3157) on the 4-hour chart. I recommend buying the pound again if the quotes close above the downward trend line on the hourly chart with the goals of 1.3150 – 1.3200.
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.