FX.co ★ GBP/USD. January 22. COT report. UK: vaccination is in full swing. The Bank of England is unlikely to lower its key rate at the first meeting of 2021

GBP/USD – 1H.

According to the hourly chart, the quotes of the GBP/USD pair again performed an increase to the level of 1.3698. This time, the pair closed above it, however, it could not continue to grow above the corrective level of 127.2% (1.3744). There were a rebound and a reversal in favor of the US currency with a close under the level of 1.3698. Thus, now traders can expect a fall to the Fibo level of 100.0% (1.3625). Closing the pair's rate below this level will further increase the probability of a further drop in quotes. Meanwhile, the vaccination process in the UK is in full swing. More than 5 million people have already received the first dose of the coronavirus vaccine. However, in recent days, very high death rates from COVID-2019 have still been recorded in Britain. Meanwhile, the Briton began to fall and this time gives reason to assume that the fall will not be weak. The pair failed to close above the 1.3700 level for a long time, so the bull traders showed some weakness and inability to continue pushing the pound up. I would like to remind you that the British economy is not at its best right now, as both Andrew Bailey and Rishi Sunak said this week. Also, the pound has been growing non-stop for more than three months and has managed to grow by more than 1000 points during this time. It is high time for the British dollar to retreat a little, and for the pair to start a correction of 300-400 points down.

GBP/USD – 4H.

On the 4-hour chart, the GBP/USD pair performed a reversal in favor of the US dollar and it can close under the corrective level of 127.2% (1.3701) in the next few hours, which will allow traders to count on the continuation of the fall in quotes in the direction of the next corrective level of 1.3481. I believe that now is the right time to start moving down.

GBP/USD – Daily.

On the daily chart, the pair's quotes performed a consolidation above the corrective level of 100.0% (1.3513), and then rebound from it. Thus, the growth process can be continued in the direction of the Fibo level of 127.2% (1.4084). On the two lower charts, the quotes began to fall, so the level of 1.3513 looks like a very real target. The future will depend on whether there will be a rebound from this level or a close below it.

GBP/USD – Weekly.

On the weekly chart, the pound/dollar pair completed a close over the second downward trend line. Thus, the chances of long-term growth of the pound are significantly increased.

Overview of fundamentals:

There were no economic reports in the UK on Thursday. However, traders again did not need any data to buy the British.

News calendar for the United States and the United Kingdom:

UK - change in retail trade volume with and without fuel costs (07:00 GMT).

UK - PMI index for the manufacturing sector (09:30 GMT).

UK - PMI index for the services sector (09:30 GMT).

US - index of business activity in the manufacturing sector (14:45 GMT).

US - PMI index for the service sector (14:45 GMT).

On January 22, the UK and the US will release indices of business activity in the services and manufacturing sectors. In the UK, the services sector is expected to remain below the 50.0 level. Also today, a report on retail trade in Britain has already been released, which turned out to be significantly worse than forecasts. The Briton in this regard began to fall.

COT (Commitments of Traders) report:

The latest COT report from January 12 showed finally serious changes in the mood of major market players. The "Non-commercial" category of traders opened 10,460 long contracts during the reporting week, which is the maximum number of long contracts opened in recent months. Thus, the mood of speculators became sharply more "bullish". 3,200 short contracts were also opened. Thus, in general, speculators have opened almost 14,000 new contracts, which has also not been the case for a very long time. Traders seem to be starting to believe in the British pound again and are also willing to trade the pound more actively than in the past few months. Brexit is behind us, the UK and the EU continue to trade duty-free with each other, so interest in the British is starting to return.

GBP/USD forecast and recommendations for traders:

I recommend making new purchases of the British dollar when the quotes bounce back from the levels of 100.0% (1.3625) on the hourly chart or 100.0% (1.3513) on the daily chart with the targets of 1.3698 and 1.3744. It was recommended to sell the pound sterling at the rebound from the level of 1.3698. The rebound occurred from 1.3744, but the target is the same - the level of 1.3625. The next target is 1.3513.

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 for speculative profit, but to support current activities or export-import operations.

"Non-reportable positions" - small traders who do not have a significant impact on the price.