FX.co ★ GBP/USD. February 8. COT report. Good news for the US economy, bad news for the US dollar.

GBP/USD – 1H.

According to the hourly chart, the quotes of the GBP/USD pair continued the growth process on Friday and reached the corrective level of 127.2% (1.3744) by the end of the day. Traders could already remember this level forever, as the quotes return to it for the sixth time. Thus, a new rebound from this level will again allow traders to count on a reversal in favor of the US currency, and some fall in the direction of the levels of 1.3698 and 1.3625. Closing above the level of 1.3744 will increase the chances of further growth of the British dollar in the direction of the level of 1.3820. The mood of traders on the hourly chart is characterized as "bullish". Meanwhile, in addition to the statistics package released in the US on Friday, there was other newsworthy of attention. Throughout January 2021, news about the adoption of a new package of assistance to the American economy, which was developed by the new President Joe Biden, was actively discussed. However, as expected, this package was opposed by almost all Republicans in Congress. In the lower house, there should have been no problems with the adoption of the package. However, in the Senate, 60 votes are required for the package to go to Joe Biden for signature. And there are only 50 Democrats in the Senate. So instead of trying to negotiate with the Republicans, who also prepared their plan to save the economy, which is three times smaller than Biden's, they made a "knight's move". The lower house of Congress has approved a budget resolution that allows passage of the aid package bill by a simple majority in the Senate. The Senate itself also approved the resolution by a simple majority, and now it is unlikely that anything or anyone will prevent Biden and his fellow party members from accepting exactly the aid package that they planned, that is, in the amount of $ 1.9 trillion. This is great news for the US economy, but bad news for the dollar, as it means that the US will turn on the printing press again.

GBP/USD – 4H.

On the 4-hour chart, the GBP/USD pair performed a reversal in favor of the British dollar and now continues the growth process in the direction of the upper border of the side rectangle, which displays the side corridor in which the pair has been for several weeks. Thus, a close above the corridor, as well as a close above the level of 1.3744, will allow traders to expect continued growth in the direction of the next corrective level of 161.8% (1.3977).

GBP/USD - Daily.

On the daily chart, the pair's quotes made a consolidation above the corrective level of 100.0% (1.3513), which still allows us to count on continued growth in the direction of the Fibo level of 127.2% (1.4084).

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:

On Friday, the Governor of the Bank of England, Andrew Bailey, made a speech in the UK, however, he did not report anything remarkable. I spoke about the reports from America in an article on the euro currency.

US and UK news calendar:

UK - Bank of England Governor Andrew Bailey will deliver a speech (15:30 GMT).

On February 5, the UK will host a new speech by Andrew Bailey as part of a hearing of the Treasury Select Committee on Regulation and the Financial Conduct Authority.

COT (Commitments of Traders) report:

The latest COT report from February 2 for the British was much more "calm" than for the Europeans. During the reporting week, the "Non-commercial" category of traders opened 5.5 thousand long contracts and only 2 hundred fewer short contracts. Thus, the mood of the major players, according to the COT report, has not changed. Speculators continue to maintain a very restrained "bullish" mood, which can not be said by the behavior of the Briton itself, which continues to remain very high and does not show any signs of wanting to start falling.

Forecast for GBP/USD and recommendations for traders:

It is recommended to make new purchases of the British dollar when closing above the level of 1.3744 on the hourly chart with a target of 1.3820. It is recommended to sell the pound sterling when the quotes rebound from the level of 1.3744 on the hourly chart with the goals of 1.3698 and 1.3625.

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.