GBP/USD – 1H.
According to the hourly chart, the GBP/USD pair quotes returned to the corrective level of 161.8% (1.3375) and spent the past day near this level. Closing the pair's rate above it will work in favor of the British currency and a possible resumption of the growth process in the direction of the Fibo level of 200.0% (1.3499). A new rebound from it will work in favor of the US currency and some fall in the direction of the Fibo level of 127.2% (1.3264). Meanwhile, negotiations between London and Brussels continue. Minister Michael Gove and European Commission Deputy Chairman Maros Sefcovic held intensive talks on the protocol for Northern Ireland and reached an agreement on all the issues discussed. In particular, London agreed not to include in its internal market bill controversial provisions that violate the previously reached agreement with the EU on Brexit, especially about compliance with the protocol on the border between Northern Ireland and Ireland. Thus, we can say that the parties have already agreed on this protocol for the second time. However, there is no progress on the most important agreement. Now the account goes for days, however, this only affected the nature of the statements of diplomats. If earlier both sides talked about "several days" during which everything should be resolved, now they are talking about "one day". Boris Johnson and Ursula von der Leyen are due to meet in person in Brussels today, where officials will try to break the deadlock. However, according to Michel Barnier, the chances of a deal in 2020 are "negligible".
GBP/USD – 4H.
On the 4-hour chart, the GBP/USD pair performed two rebounds from the corrective level of 76.4% (1.3291), a reversal in favor of the British, and resumed the growth process in the direction of the corrective level of 100.0% (1.3481). Fixing the quotes below the level of 76.4% will allow traders to count on a new fall in the pair. Today, the divergence is not observed in any indicator.
GBP/USD – Daily.
On the daily chart, the pair's quotes performed a rebound from the corrective level of 100.0% (1.3513). And this is the most important and clear signal on all charts. If the rebound is not false, then the Briton is waiting for a noticeable drop. But much now depends on the information background.
GBP/USD – Weekly.
On the weekly chart, the pound/dollar pair performed an increase to the second downward trend line. A rebound from it in the long term will mean a reversal in favor of the US dollar and a long fall in the British dollar's quotes.
Overview of fundamentals:
There were no major economic reports in the UK and the US on Tuesday. However, traders are now fully focused on the topic of Brexit and trade negotiations between the UK and the EU.
The economic calendar for the US and the UK:
On December 9, the news calendars in the UK and America are empty again, so the information background may still be missing today. Unless there is new news about the progress of negotiations between London and Brussels.
COT (Commitments of Traders) report:
The latest COT report showed a new increase in the number of long contracts held by speculators. This time, their total number increased by 3,601 contracts, and the number of short-contracts decreased by 4,441 units. Thus, the mood of speculators has become much more "bullish". At the same time, this is a very rare situation. The number of long and short contracts focused on the hands of the "Non-commercial" and "Commercial" categories is almost equal. The same applies to data for all categories of major players. Thus, the market is now in balance, however, the future of the British is still more dependent on the outcome of trade negotiations between London and Brussels. Major traders will also adjust to these results. Thus, their mood may change very dramatically, based on the results of the negotiations.
GBP/USD forecast and recommendations for traders:
At this time, I recommend that you be extremely careful with opening any deals on the British. First, it is extremely difficult to find signals right now. Secondly, the pair continues to move very raggedly and often changes direction. I recommend making new purchases of the British dollar if the closing above the level of 161.8% (1.3375) is completed on the hourly chart with a target of 1.3499. I recommend selling the British dollar with a target of 127.2% (1.3264) if a new rebound is made from the level of 161.8%.
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 for current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.