GBP/USD – 1H.
According to the hourly chart of the GBP/USD pair on Tuesday, the pair's quotes performed an increase to the corrective level of 50.0% (1.3909), a rebound from it, a reversal in favor of the US currency, and a strong fall to the Fibo level of 50.0% (1.3792) on the small Fibo grid. The report on US inflation also put pressure on the US currency, and even earlier, data on British unemployment caused an increase in the British dollar. However, this did not make any sense at the end of the day since the US dollar still rose. Just half an hour ago, the UK released an inflation report for August, which showed an increase in consumer prices by 3.2%. The previous value was 2.0%, so we are talking about a strong acceleration in price growth. The consumer price index increased by 0.7% m/m. The core consumer price index rose to 3.1% y/y. Traders expected lower values, so the British dollar may try to recover today after yesterday's fall.
In general, the statistics from Britain yesterday and today turned out to be very positive. However, as I have already said, the pound failed to extract benefits for itself. For the third time, not far from the level of 1.3892, there is a reversal in favor of the US currency, and a fall begins. Thus, bull traders show their unwillingness to make new purchases of the pair. Today, there will also be a report on industrial production in the United States, which is unlikely to be remembered by traders. And the next important event will be the Fed meeting. It seems that traders are already trading with this particular event in mind since it may be announced that the incentive program will be curtailed. I also remind you that the pound/dollar pair has been trading between the levels of 1.3600 and 1.4200 for several months. It suggests that traders do not give preference to either the dollar or the pound in the long term.
GBP/USD – 4H.
The GBP/USD pair on the 4-hour chart performed a new reversal in favor of the US currency near the corrective level of 23.6% (1.3870). The pair's quotes performed a drop to the corrective level of 50.0% on the small Fibo grid and rebound from it. Thus, the growth process can begin today, which is supported by British statistics. For the second day in a row, bull traders are frankly pleased with reports from the UK. The bearish divergence of the CCI indicator, which was formed yesterday, also favored the US currency and a strong drop in quotes. There are no new divergences at this time.
News calendar for the United States and the United Kingdom:
UK - consumer price index (06:00 UTC).
US - change in the volume of industrial production (13:15 UTC).
On Wednesday, all the planned reports were already released in the UK, the most important of which (inflation) pleased bull traders. There will be no more important reports today. Even the report on industrial production in the United States is unlikely to interest traders, but a small reaction can be expected.
COT (Commitments of Traders) report:
The latest COT report on September 7 for the pound showed that the mood of major players has become more "bearish." During the reporting week, speculators closed 5,437 long contracts and opened 2,427 short contracts. The total number of long contracts in the hands of speculators is already almost twice less than the total number of short contracts. Therefore, in general, the mood of speculators is now "bearish." However, traders still have big problems with closing at 1.3600, and at this time, there are still excellent opportunities for the growth of the British dollar quotes. Thus, the further fall of the British is not guaranteed. We need graphical sell signals so that they coincide with the data of COT reports.
GBP/USD forecast and recommendations for traders:
Today, I recommend buying the pair at the rebound from the level of 1.3792 on the hourly chart with targets of 1.3830 and 1.3892. I recommend selling the pound today at the closing of quotes under the level of 1.3792 on the hourly chart with the targets of 1.3747 and 1.3731.
"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 ensure current activities or export-import operations.
"Non-reportable positions" are small traders who do not have a significant impact on the price.