GBP/USD – 1H.
According to the hourly chart, the quotes of the GBP/USD pair performed an increase to the level of 1.3988, a rebound from it, a reversal in favor of the US currency, and resumed the process of falling in the direction of the corrective level of 161.8% (1.3895), under which the close was made this morning. Thus, the process of falling quotes of the pair can now be continued in the direction of the next level of 1.3820 and even further down. Meanwhile, the reasons for such a serious strengthening of the US dollar are difficult to find in the pound/dollar pair. Earlier, I said that the growth of the dollar raises questions in the euro/dollar pair. The US dollar has been falling for a long period, and now that it has finally started to rise, this event may be due to technical reasons. After all, there are no reasons for a trend correction. Traders simply fix part of the profit, the rate is rolled back and then a new trend movement begins.
Thus, now a corrective fall could begin for both pairs. To be more precise, for the euro/dollar pair, it began at the very beginning of January, and now it has only resumed. In the future, it is quite possible to expect a further drop in quotes up to the level of 1.3000, which will be approximately 50% of the total 11-month growth of the pair. Also, everything can end up falling by 600-800 points, as it was in September 2020, after which the growth process of the pair will be resumed. On Monday, the UK published a report on business activity in the manufacturing sector, however, it had the same impact on traders as similar reports in the US and the European Union. Tomorrow, British Finance Minister Rishi Sunak is due to present a draft budget for 2021, in which the greatest interest is caused by government programs to support businesses, without which the unemployment rate could rise sharply in the coming months.
GBP/USD – 4H.
On the 4-hour chart, the GBP/USD pair performed a small growth process after the "bullish" divergence was formed at the CCI indicator. However, the divergence was against the trend, so soon the pair performed a reversal in favor of the US currency and resumed the process of falling in the direction of the level of 1.3850 and the ascending trend line, which still characterizes the mood of traders as "bullish".
GBP/USD – Daily.
On the daily chart, the pair's quotes closed under the Fibo level of 127.2% (1.4084), which now allows us to count on a slight drop in quotes, but more important now are the data from the hourly and 4-hour charts.
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 news from the UK and the US did not have a strong impact on traders. The information background was generally weak.
News calendar for the United States and the United Kingdom:
On March 2, the calendars of economic events in the United Kingdom and the United States are empty, so there will be no information background today.
COT (Commitments of Traders) report:
The latest COT report from February 23 on the British pound was extremely eloquent. During the last reporting week, speculators opened 7,243 new long contracts and closed almost 2 thousand short contracts. Thus, their mood has become sharply more "bullish", which fully coincides with what is happening in the market for the pound/dollar pair. Only in the following days (which were not included in the report) did the fall of the British pound begin, so the next COT report will be of interest. So far, the overall picture remains in favor of the British, as the category of "Non-commercial" traders continues to increase long contracts.
Forecast for GBP/USD and recommendations for traders:
It is recommended to buy the British dollar on Tuesday in case of a rebound from the level of 1.3850 on the 4-hour chart with a target of 1.3979. It was recommended to sell the pound sterling at the rebound from the level of 1.3988 with the targets of 1.3895 and 1.3820 on the hourly chart. The first goal has been achieved, now we support transactions with the second goal.
"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 provide current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.