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FX.co ★ GBP/USD. November 23. COT report. Major players are lying low and waiting for the outcome of the negotiations between London and Brussels. Time is catastrophically short.

GBP/USD. November 23. COT report. Major players are lying low and waiting for the outcome of the negotiations between London and Brussels. Time is catastrophically short.

GBP/USD – 1H.

GBP/USD. November 23. COT report. Major players are lying low and waiting for the outcome of the negotiations between London and Brussels. Time is catastrophically short.

According to the hourly chart, the GBP/USD pair quotes have consolidated above the corrective level of 127.2% (1.3264) and continue the growth process towards the next Fibo level of 161.8% (1.3375), despite the fact that they previously consolidated under the upward trend corridor. However, the pair's behavior in recent days indicates that traders are still bullish. Despite the fact that there is no positive news from the UK regarding the agreement of trade terms with the European Union, the British pound continues to show growth against the dollar. Traders still believe that a deal will be agreed upon and London and Brussels will not trade with each other under WTO rules from January 2021. At the end of last week, European Commission President Ursula von der Leyen announced the progress made in the past few days. Several other European officials said they had reached 95% of the full agreement on the deal. However, there is also new information that the most important and key issues remain without a proper level of coherence. It is still a question of fishing, fair competition, and dispute resolution. However, traders believe that in the near future the parties will be able to come to a common opinion on these issues. They believe it despite the fact that today is already November 23, and the negotiations were supposed to end on November 15 at the latest. There may not be enough time for both parliaments to ratify the trade agreement.

GBP/USD – 4H.

GBP/USD. November 23. COT report. Major players are lying low and waiting for the outcome of the negotiations between London and Brussels. Time is catastrophically short.

On the 4-hour chart, the GBP/USD pair, after rebounding from the corrective level of 23.6% (1.3191), performed a reversal in favor of the British currency and continues the growth process in the direction of the corrective level of 0.0% (1.3481). Today, the divergence is not observed in any indicator. Closing the pair's exchange rate under the Fibo level of 23.6% will work in favor of the US currency and some fall in the direction of the corrective level of 38.2% (1.3010).

GBP/USD – Daily.

GBP/USD. November 23. COT report. Major players are lying low and waiting for the outcome of the negotiations between London and Brussels. Time is catastrophically short.

On the daily chart, the pair's quotes continue to grow in the direction of the corrective level of 100.0% (1.3513). However, when trading a pair, I recommend paying more attention to the lower charts. They are now more informative.

GBP/USD – Weekly.

GBP/USD. November 23. COT report. Major players are lying low and waiting for the outcome of the negotiations between London and Brussels. Time is catastrophically short.

On the weekly chart, the pound/dollar pair completed a new close above the lower downward trend line, although a false breakout of this line followed earlier. In recent weeks, the pair has made new attempts to gain a foothold over both trend lines.

Overview of fundamentals:

On Friday, the UK released a report on retail sales for October, and this report exceeded traders' expectations, providing additional support to the British currency.

News calendar for the United States and the United Kingdom:

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

UK - services PMI (09:30 GMT).

UK - composite PMI (09:30 GMT).

US - manufacturing PMI (14:45 GMT).

US - services PMI (14:45 GMT).

US - composite PMI (14:45 GMT).

UK - Parliamentary hearings on the Bank of England's monetary policy report (15:30 GMT).

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

On November 23, the US and UK calendars are literally full. There will be a lot of news, and in addition to them, information on trade negotiations can be received at any time.

COT (Commitments of Traders) report:

GBP/USD. November 23. COT report. Major players are lying low and waiting for the outcome of the negotiations between London and Brussels. Time is catastrophically short.

The last two COT reports showed a fairly sharp increase in the number of open short contracts for the "Non-commercial" category of traders. This suggests that speculators continue to believe in the fall of the British dollar in the very near future. Over the past three weeks, speculators have been building up short contracts and closing long ones. In general, major players are more afraid of opening new contracts, so their total number is falling. This is clearly seen in the table above. So, the number one conclusion is that the major players are afraid of the uncertainty associated with the trade deal and the British economy, so they do not want to trade the pound more actively. Conclusion number two: speculators believe more in the fall of the pound than in its growth.

Forecast for GBP/USD and recommendations for traders:

Today, I recommend selling the GBP/USD pair with a target of 1.3010, if the close is made under the level of 23.6% (1.3191) on the 4-hour chart. I recommend that you be careful with the pair's purchases now, as the quotes have consolidated under the trend corridor on the hourly chart, the COT report shows the faith of major players in the fall of the pound, and there is still no trade deal between London and Brussels.

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 for current activities or export-import operations.

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

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade
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