GBP/USD – 1H.
According to the hourly chart, the quotes of the GBP/USD pair continue the process of falling and performed a consolidation under the Fibo level of 76.4% (1.3154). Thus, the drop in quotes can be continued in the direction of the next corrective level of 100.0% (1.3053). For the pound, the most difficult days and weeks begin. In general, the British dollar has been growing against the US currency all summer. The reasons were in America, where the second "wave" of the coronavirus epidemic began and the economic collapse of the economy over the past 100 years was recorded. However, autumn came and traders remembered that Brexit will be officially completed in 4 months. The UK will leave the EU without any equivocations, "transition periods" and will now live a completely independent life, which is what the people of Britain so wanted. However, at the same time, there is still no trade agreement with the European Union, and Boris Johnson seems ready to complete Brexit without this very agreement. 7 rounds of negotiations did not bring the expected result. Today begins the eighth round, which is unlikely to be much more successful than the previous seven. Thus, the British dollar may now fall precisely because of new fears of traders about the lack of a deal, which will hit both the European economy and the British economy in 2021, when the country and the bloc will start trading with each other under the rules and regulations of the WTO.
GBP/USD – 4H.
On the 4-hour chart, the GBP/USD pair performed a consolidation under the lower border of the upward trend corridor and under the Fibo level of 161.8% (1.3157), which once again increases the probability of a further fall in the British dollar quotes in the direction of the corrective level of 127.2% (1.2964). Thus, the mood of traders is now characterized as "bearish". Today, the divergence is not observed in any indicator.
GBP/USD – Daily.
On the daily chart, the pair's quotes closed under the corrective level of 100.0% (1.3199). Thus, on the daily chart, the pair performed a reversal in favor of the US currency and now has a high chance of continuing to fall in the direction of the corrective level of 76.4% (1.2776).
GBP/USD – Weekly.
On the weekly chart, the pound/dollar pair closed above the lower downward trend line. Thus, the growth process can now be continued in the direction of the second downtrend line, fixing above which will further increase the probability of further growth of the British dollar.
Overview of fundamentals:
There were no major economic reports in the UK or the US on Monday. However, there are far more important events for Britain right now than economic reports.
News calendar for the United States and the United Kingdom:
On September 8, the news calendars of the UK and US do not contain any interesting reports and speeches. Nevertheless, information may be received about the negotiations between Britain and the European Union on Brexit.
COT (Commitments of Traders) report:
Unlike the COT report on the euro currency, the latest COT report on the pound was completely different. During the reporting week, major speculators again increased long-contracts, and also increased short-contracts. Thus, the mood of the "Non-commercial" group as a whole remained "bullish". Over the past 10 weeks, the total number of long contracts focused on the hands of speculators has also increased significantly, while the number of short contracts has decreased. So, according to the latest report, I can't conclude that major traders have already decided to get rid of the pound. However, graphical analysis shows that the British dollar has a high chance of continuing to fall. Thus, the next COT report may show a weakening of the "bullish" mood of major traders.
Forecast for GBP/USD and recommendations for traders:
I recommend selling the British currency with a target of 1.2964, as the quotes were fixed under the ascending corridor on the 4-hour chart. I do not recommend opening purchases of the British dollar in the near future, as the pair has just gained a foothold under the trending upward corridor.
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.