GBP/USD – 1H.
According to the hourly chart, the GBP/USD pair quotes continue the growth process and closed yesterday above the Fibo level of 200.0% (1.4063). Thus, the growth process can now be continued in the direction of the level of 1.4190. The upward trend corridor continues to characterize the current mood of traders as "bullish". Closing the pair's rate under this corridor will work in favor of the US dollar and start falling towards the levels of 1.3895 and 1.3820. Meanwhile, British Prime Minister Boris Johnson has unveiled a plan to get the country out of quarantine. According to this plan, by June 21, all restrictions on social contacts will be lifted, and the country will slowly return to its usual life. Boris Johnson said that the plan consists of four stages of lifting the existing restrictions. From March 8, all schools in England will be open and walking in public places will be allowed. From March 29, small companies will be allowed to gather in the open air. From April 12, all shops, hairdressers, gyms, and fitness clubs will open. From May 17, large companies will be allowed to gather in the open air, and in bars and restaurants – companies of up to 6 people. Cinemas, hotels, museums, and stadiums with restrictions on the number of spectators will resume their work. From June 21, it is planned to lift all bans and restrictions. Johnson clarified that at each stage, decisions will be made based on data on the number of cases, and not just based on dates. Traders are also interested in information about whether the UK government will support businesses and households after the previous support program expires in March. If not, the country is predicted to experience severe unemployment. Just this morning, the unemployment report for December will be released, which is expected to increase to 5.1%.
GBP/USD – 4H.
On the 4-hour chart, the GBP/USD pair closed above the corrective level of 161.8% (1.3979), which increases the probability of further growth towards the next level of 1.4126. The upward trend line still keeps traders' mood bullish. However, now no one has any doubts that the trend is bullish. The consolidation of the exchange rate above the level of 1.4126 will allow us to expect continued growth in the direction of the next corrective level of 200.0% (1.4287).
GBP/USD – Daily.
On the daily chart, the pair's quotes performed an increase to the Fibo level of 127.2% (1.4084). A rebound from this level will allow us to expect a reversal in favor of the US currency and a slight drop in the direction of 1.3513. Closing the pair above 127.2% will increase the chances of continuing growth in the direction of the corrective level of 161.8% (1.4812).
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 Monday, the US and UK calendars did not contain any interesting entries. Thus, there was no information background, however, the Briton continued to grow steadily.
News calendar for the United States and the United Kingdom:
UK - change in the number of applications for unemployment benefits (07:00 GMT).
UK - unemployment rate (07:00 GMT).
UK - change in the level of average earnings (07:00 GMT).
US - Federal Reserve Board of Governors Chairman Jerome Powell will deliver a speech (15:00 GMT).
On February 23, the calendars of economic events in the United Kingdom and the United States contain a sufficient amount of important information. Special attention should be paid to the unemployment report and Jerome Powell's speech.
COT (Commitments of Traders) report:
The latest COT report from February 16 on the British pound was extremely boring, as was the report on the euro. During the reporting week, the "Non-commercial" category of traders opened 369 long contracts and closed 3,308 short contracts. Thus, the mood of speculators has become more "bullish", which further increases the chances of the British dollar continuing to grow. In general, during the reporting week, almost an equal number of long and short contracts were opened by all players. Nevertheless, despite the small changes, the pound continues a strong and long process of growth.
Forecast for GBP/USD and recommendations for traders:
It was recommended to buy the British dollar in case of closing above the level of 1.3979 on the 4-hour chart with a target of 1.4126. I recommend keeping these deals open for now. I recommend selling the pound sterling when the quotes are fixed under the uptrend corridor on the hourly chart with the targets of 1.3895 and 1.3820.
"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.