GBP/USD – 1H.
According to the hourly chart, the quotes of the GBP/USD pair performed a strong fall yesterday, then a strong growth, a rebound from the Fibo level of 200.0% (1.3499) and a new reversal in favor of the US currency with a fall to the corrective level of 161.8% (1.3375). A rebound of the pair's exchange rate from this level will work in favor of the UK currency and new growth in the direction of the Fibo level of 200.0%. Closing quotes below the level of 161.8% will increase the chances of continuing to fall in the direction of the next Fibo level of 127.2% (1.3264). Meanwhile, new rumors about Brexit negotiations have come out of the UK. According to these rumors, London and Brussels are still approaching a trade agreement, some of them even say about the possible conclusion of a deal in the next day. According to unverified information, the EU and the UK are still moving towards each other on the issue of fishing and a consensus can be reached in the near future. However, the official information says that the European Parliament reiterates its invitation to London to extend the transition period. Senior EU officials remind that Britain now has a double burden: Brexit and the new strain of COVID-2019. However, British Prime Minister Boris Johnson continues to reject this proposal. "Our position in the transition period is clear. It will end on December 31. Our decision will not change," Johnson said. Also, Boris Johnson himself said that the negotiations are progressing very difficult. Thus, I tend to believe that the parties continue to move not to meet the deal, but to meet the failure.
GBP/USD – 4H.
On the 4-hour chart, the GBP/USD pair returned to the corrective level of 100.0% (1.3481), rebounded from it, and turned in favor of the US currency. As a result, the decline in quotes can now be continued in the direction of the corrective level of 76.4% (1.3291). Today, the divergence is not observed in any indicator. Fixing the pair above the level of 100.0% will work in favor of resuming growth in the direction of the corrective level of 127.2% (1.3701).
GBP/USD – Daily.
On the daily chart, the pair's quotes performed a consolidation under the corrective level of 100.0% (1.3513), which now increases the probability of a new fall with the target of the Fibo level of 76.4% (1.3016).
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:
On Monday, there was not a single economic report in the UK and the US, however, there was a whole lot of other news and rumors that had a strong impact on the British.
News calendar for the United States and the United Kingdom:
UK - change in GDP (07:00 GMT).
US - change in GDP for the quarter (13:30 GMT).
US - consumer confidence indicator (15:00 GMT).
On December 22, the UK already released a report on GDP for the third quarter, which increased compared to the previous estimate to 16.0% q/q. The Briton didn't react. Next up is the US GDP report for the third quarter.
COT (Commitments of Traders) report:
The latest COT report showed that speculators were getting rid of both long and short contracts. This again suggests that traders are afraid of the Briton and the information background that exists now. It is extremely difficult to predict what will happen to the UK economy in 2021. Therefore, the "Non-commercial" category of traders prefers to close trades rather than open new ones. This time, speculators closed 4 thousand long contracts and 2.5 thousand short contracts. Thus, the mood of speculators has become much less "bullish". At the same time, the British continued the growth process, thus, I can draw the same conclusion as for the euro. Major traders are preparing for a new fall in the pound.
GBP/USD forecast and recommendations for traders:
I recommend buying the British dollar when the quotes rebound from the corrective level of 161.8% (1.3375) on the hourly chart with a target of 1.3499. You can sell the pound sterling when it is fixed at the level of 161.8% (1.3375) on the hourly chart with a target of 1.3264.
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.