FX.co ★ GBP/USD. December 4. COT report. Brexit may be postponed for another year if the parties fail to agree on a trade deal

GBP/USD – 1H.

According to the hourly chart, the quotes of the GBP/USD pair performed an increase to the corrective level of 200.0% (1.3499) and rebound from it. As a result, the process of falling began, however, it does not last very long. Given the current low demand for the US dollar in the market, the growth process can be resumed at any time. Brussels and London continue to negotiate, and today we received new "good" news: negotiations are resuming. However, there is no news about when the negotiations end. There are also no reports of progress or lack of it. Thus, traders continue to be in the "information fog". The difficulty lies not only in the pressing deadlines (the final Brexit will take place on December 31), but also in the fact that London is not eager to make serious concessions, and the European side needs to meet the requirements of the 27 EU member states. Emmanuel Macron has said that his country can veto a free trade agreement if France's interests are not taken into account. By French interests, Macron means French sailors' access to British waters. And probably, Macron will not agree to the proposal of London, according to which 60% of the fish caught should be returned to British fishermen. Thus, France can impose a veto, and then everything will depend on Boris Johnson. It may still give the go-ahead to extend the transition period, however, many analysts say it is unlikely to take this step. The EU summit will be held on December 10-11. If the agreement is not signed by this time, then it is not clear what will happen next.

GBP/USD – 4H.

On the 4-hour chart, the GBP/USD pair performed an increase to the corrective level of 0.0% (1.3481). The rebound of quotes from this level will work in favor of the US currency and some fall in the direction of the corrective level of 23.6% (1.3191). Bearish divergence in the CCI indicator increases the probability of the beginning of a fall in quotes. Closing the pair's rate above 0.0% will increase the chances of further growth.

GBP/USD – Daily.

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 the pair, I recommend paying more attention to the lower charts. They are more informative.

GBP/USD – Weekly.

On the weekly chart, the pound/dollar pair performed an increase to the second downward trend line. A rebound from it in the long term will mean a reversal in favor of the US dollar and a long fall in the British dollar's quotes.

Overview of fundamentals:

On Thursday, the UK released the index of business activity in the service sector. Although it remained below the level of 50, the British pound continued to grow. Now traders are interested in other issues.

The economic calendar for the US and the UK:

US - unemployment rate (13:30 GMT).

US - change in the number of people employed in the non-agricultural sector (13:30 GMT).

US - change in the average hourly wage (13:30 GMT).

On December 4, the UK news calendar is empty. But in America, several important reports will be released at once. Also, there may still be news from Britain about the progress of the negotiation process between Brussels and London.

COT (Commitments of Traders) report:

The latest COT report showed a sharp increase in the number of long contracts held by speculators. Thus, the mood for the reporting week in the category of "Non-commercial" traders became more "bullish". However, before that, it became more "bearish" for several weeks, and the British did not get much cheaper. Thus, I believe that one report can not radically change the mood of speculators. There were also 354 short contracts opened, which is very small. In general, I can say that the chances of growth for the British dollar have even increased slightly recently, but most other factors still suggest that this currency should start falling in the near future.

GBP/USD forecast and recommendations for traders:

At this time, I recommend that you be extremely careful with opening any deals on the British. First, it is extremely difficult to find signals right now. Secondly, the pair continues to move very raggedly and often changes direction. I recommend making new purchases of the British dollar if it is fixed above the level of 200.0% (1.3499) on the hourly chart with targets of 1.3600-1.3698.

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.