GBP/USD – 1H.
Hi, dear traders!
On Monday, GBP/USD fell to the retracement level of 127.2% (1.3296) and bounced upwards, according to the 1H chart. Now, the pair is rising towards the 100% Fibonacci level of 1.3411. Despite the best efforts of bears, the price failed to close below 1.3296 for the second time. The pound has great support, but its upside movement remains limited. There are no UK events on the economic calendar today. Two US officials are scheduled to give speeches on Tuesday - Jerome Powell, the chairman of the Federal Reserve, and Janet Yellen, the US Secretary of Treasury. Powell already spoke yesterday about the Omicron variant of COVID-19, saying it could have a negative impact on the economy. If Omicron spreads just as easily as the Delta variant, it could weigh down on the US economy, forcing the Fed to revise its monetary tightening plan. In this situation, the QE scheme could be extended, particularly if Friday's non-farm payroll data turns out to be disappointing. Amid the Fed's current focus on the labor market, Powell noted that Omicron could slow down job growth. Janet Yellen is also concerned about the US debt ceiling - if the ceiling is not raised until December 15, the Treasury Department would not be able to provide necessary funding. Yellen will be focusing on measures by the US Congress to resolve this problem.
GBP/USD – 4H.
According to the 4H chart, the pair fell towards the retracement level of 61.8% (1.3274). After a bullish divergence formed near the MACD indicator, GBP/USD reversed upward towards the retracement level of 50.0% (1.3457). If the quote closes above the downward trend channel, further upward movement could be likely. However, without any news to boost the pair, its upside remains limited. If the GBP/USD settles below 1.3274, it could continue to decline further towards the retracement level of 76.4% (1.3044).
US and UK economic calendar:
US - speech by Jerome Powell, chairman of the Federal Reserve (15-00 UTC)
US - speech by Janet Yellen, US Secretary of Treasure (15-00 UTC)
While there are no events on the economic calendar in the UK, the speeches by Powell and Yellen are not to be ignored, even though they could fail to influence traders.
COT (Commitments of Traders) report:
The latest COT report from November 23 indicates an increasingly bearish trend among major market players for the fourth week in the row. Traders closed 1,288 Long positions and closed 3,043 Short positions. In total, over 50,000 Short positions has been opened over the past month, matching the estimated amount of open Long positions. The emerging sentiment of traders over the past weeks indicates a downturn for the pair is likely, supported by its limited upside movement on the charts. At the moment, the number of Long and Short position is practically the same.
Outlook for GBP/USD:
Previously, traders were recommended to buy the pair if it bounced off the 1.3296 level on the H1 chart with 1.3411 being the target. It would be advisable to keep these long positions open. Traders are advised to sell the pair if it closes below 1.3296 with 1.3150 being the target.
Terms:
Non-commercial traders are major market players: banks, hedge funds, investment funds, and large private investors.
Commercial traders are commercial enterprises, firms, banks, corporations, companies that buy currency not to obtain profit, but to maintain current activities or import-export operations.
The category of non-reportable positions includes small traders who do not have a significant impact on the price.