GBP/USD – 1H.
According to the hourly chart, the GBP/USD pair remains inside the upward trend corridor. Thus, the "bullish" mood among traders remains, and the growth process can be resumed toward the corrective level of 100.0% (1.3913). Fixing the pair's exchange rate under the ascending corridor will favor the US currency and the continuation of the fall in the direction of the Fibo level of 50.0% (1.3663). Meanwhile, in the US, there is news that has the effect of an "exploding bomb." Senator Rand Paul said it is necessary to dismiss the country's chief epidemiologist Anthony Fauci. It turned out that the National Institute of Health allocated funds for virus research; in particular, the Wuhan Institute of Virology funded it. According to the senator, such actions could lead to the leakage of the virus from the laboratory, and Paul accused Fauci himself of lying.
Fauci has already replied that all experiments with the virus were under strict control, and they were not related to the creation of a new virus. Thus, in a way, the whole world can "thank" scientists for accidentally or intentionally bringing out a new virus and then releasing it to freedom. Meanwhile, in the United States, the coronavirus epidemic continues to recede. Every week the number of cases of the disease decreases. However, in the United States, a new strain of the virus was identified, which is more dangerous and contagious than the last delta strain. Thus, new infections can break out at any moment. The pound reacts calmly to all this news and looks forward with great interest to negotiations between the EU and the UK on the Northern Ireland protocol and meetings of the Bank of England and the Fed. These events can affect the mood of traders, but only if their results are really important. So far, traders prefer to sit on the sidelines. Yesterday and on Friday, the activity of traders was almost zero. Moreover, today, the situation is unlikely to change since there will be no information background.
GBP/USD – 4H.
The GBP/USD pair on the 4-hour chart performed a fall to the lower boundary of the ascending corridor, but there was no rebound from it. Nevertheless, the pair shows an insistent desire to perform a reversal in favor of the British and resume the growth process in the direction of the corrective level of 23.6% (1.3870). Closing quotes under the ascending corridor will work in favor of the US currency and the resumption of the fall in the direction of the corrective level of 38.2% (1.3642). Emerging divergences are not observed in any indicator today.
News calendar for the USA and the UK:
On Tuesday, the calendars of economic events in the UK and the US are empty. Thus, there will be no information background today.
COT (Commitments of Traders) report:
The latest COT report from October 19 on the pound showed that the mood of the major players had become much more "bullish." In the reporting week, speculators opened 2,093 long contracts and closed 12,488 short contracts. Thus, the number of long and short contracts in the hands of major players has almost equalized. Now we can say that the mood of the "Non-commercial" category of traders is neutral, which means more attention should be paid to the graphical picture and signals. In recent weeks, the major players do not have any clear mood and then increase purchases, then increase sales. The total number of long and short contracts for all categories of traders is the same.
Forecast for GBP/USD and recommendations to traders:
I recommend new purchases of the pound when rebounding from the lower boundary of the corridor on the hourly chart with targets of 1.3795 and 1.3913. I recommend opening sales if there is closure under the ascending corridor on the hourly chart with targets of 1.3663 and 1.3603.
Terms:
"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.
"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy foreign currency not to make speculative profits 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.