GBP/USD – 1H.
According to the hourly chart, the GBP/USD pair quotes on Wednesday performed a reversal in favor of the US dollar near the corrective level of 127.2% (1.3264) and began the process of falling in the direction of the Fibo level of 100.0% (1.3176). Recently, an upward trend corridor was built, which characterizes the current mood of traders as "bullish". Closing the pair's rate under the 100.0% Fibo level will allow us to expect a fall to the lower border of this corridor, and fixing it under the corridor will lead to a further fall. Moreover, some senior officials have said that the talks will continue next week. It is expected that any results should appear before November 18, when the next summit is scheduled in the European Union. It is at this summit that the current progress of the negotiations will be reviewed. By the way, the fact that the negotiations are continuing does not mean that the negotiations are successful, and the parties are preparing to conclude an agreement. On the contrary, representatives of the highest political circles of the European Union and the UK constantly state that there are still many points of contention between the parties. Thus, the pound continues to grow on pure enthusiasm. It is still amazing for me to see its growth during such difficult times for the United Kingdom. However, now traders still have a trend corridor, which will inform us about the change in the mood of traders from "bullish" to "bearish".
GBP/USD – 4H.
On the 4-hour chart, the pound/dollar pair consolidated above the corrective level of 23.6% (1.3191), despite the "bearish" divergence in the CCI indicator. Thus, the growth process can now be continued towards the next corrective level of 0.0% (1.3481). Bull traders still own the initiative, however, the information background is now such that at any moment the British can start falling.
GBP/USD – Daily.
On the daily chart, the pair's quotes have consolidated above the corrective level of 76.4% (1.3016), which now allows us to expect further growth in the direction of the next corrective level of 100.0% (1.3513).
GBP/USD – Weekly.
On the weekly chart, the pound/dollar pair closed under the lower downward trend line, thus, a false breakout of this line followed earlier. However, in recent weeks, the pair has made new attempts to gain a foothold over both trend lines.
Overview of fundamentals:
There wasn't a single interesting report or other events worthy of attention in the UK and US on Wednesday. Thus, the information background was extremely poor.
News calendar for the United States and the United Kingdom:
UK - change in GDP (07:00 GMT).
UK - change in industrial output (07:00 GMT).
US - consumer price index (13:30 GMT).
US - number of initial applications for unemployment benefits (13:30 GMT).
US - Fed Board of Governors Chairman Jerome Powell will deliver a speech (16:45 GMT).
UK - Bank of England Governor Andrew Bailey will deliver a speech (16:45 GMT).
On November 12, the UK and US news calendars contain a large number of important events. Particular attention should be paid to the UK GDP indicator, as well as inflation in the US and the speeches of Jerome Powell and Andrew Bailey.
COT report (Commitment of Traders):
The latest COT report on the British pound showed that the mood of traders in the "non-commercial" category became even more "bearish" during the reporting week. Speculators continued to get rid of long-term contracts, closing a total of 3,281 units. At the same time, they slightly increased the number of short contracts, opening 1,146. Thus, the mood of the "non-commercial" category has become more "bearish". However, due to the US presidential election, the British pound rose strongly last week. This data was not included in the latest COT report, so I can't make a conclusion about how the mood of major traders changed after November 2. You need to wait for the next COT report and analyze it. According to the latest report, I can say that the chances of a fall in the British dollar are very high now.
Forecast for GBP/USD and recommendations for traders:
Today, I recommend selling the GBP/USD pair with a target of 1.3099, if a close is made under the Fibo level of 100.0% (1.3176) on the hourly chart. I recommend buying the British with the target of 1.3264 if a rebound from the level of 1.3176 or the lower border of the trend corridor on the hourly chart is completed.
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 to obtain speculative profit, but to ensure current activities or export-import operations.
"Non-reportable positions" are small traders who do not have a significant impact on the price.