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GBP/USD. August 29th. The pound is no different from the euro
August 29, 2023 1:25 pmVideo
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On the hourly chart, the GBP/USD pair continued its growth process on Monday, ignoring the corrective level of 100.0% (1.2590). It’s noteworthy that the current growth of the pound is so weak that it can almost be disregarded. The waves, which we will discuss shortly, speak much more eloquently of the graphical picture at the moment. It doesn’t matter much whether there will be a close above or below the 1.2590 level right now.
The waves still tell us only one thing: a “bearish” trend. Since the last downward wave broke the low of the previous wave by just a few points, one could say the “bearish” trend is waning. But look at the last upward wave; it certainly did not surpass the peak of the previous wave and didn’t even test it. Thus, the bears maintain the initiative and might launch a new assault this week. I don’t see any compelling signals to change the pair’s direction.
The informational background for the pound is very weak for the first two days of the week. Today, I can only note the JOLTS report in the US, which will show the number of job openings in the US as of the end of July. The previous figure was 9.582 million. The July figure could be 9.465 million, indicating a slight decrease. This reduction is already priced into the market, and only a lower figure might trigger a further decline in the American currency. The report would have to be quite poor for this decline to be substantial.
As we can see, there are no reports or events today that could significantly worsen the position of the US dollar. Wednesday, Thursday, and Friday will have many more crucial reports that could either support the dollar or lead to its significant decline.
On the 4-hour chart, the pair has retraced back to the 1.2620 level. A rebound from this level would favor the US currency and the resumption of a decline towards the 1.2450 level. A “bearish” divergence has formed on the CCI indicator, which increases the chances of a rebound from 1.2620. At this moment, the likelihood of a new fall in the pair is higher than that of a rise. On the hourly chart, I also don’t see signs of a trend change. The downward trend channel on the 4-hour chart also indicates a “bearish” trend.
Commitments of Traders (COT) report:
The sentiment of the “Non-commercial” category of traders has become more bullish over the last reporting week. The number of long contracts held by speculators increased by 7,520 units, while the number of short contracts decreased by 599. The overall mood of major players remains bullish, with more than a two-fold gap between the number of long and short contracts: 98,000 versus 39,000. The pound had good prospects for continued growth a few weeks ago, but now, many factors have favored the US dollar. It takes a lot of work to anticipate a strong new rise in the pound. Nevertheless, the bulls quickly disposed of their buy positions, hoping the pound might still show growth.
News Calendar for the US and UK:
US – JOLTS job openings (14:00 UTC).
On Tuesday, the economic events calendar contains just one entry, which is not significant. For the rest of the day, the influence of the news background on market sentiment will be weak.
GBP/USD forecast and advice for traders:
Selling the pound is possible upon a rebound from the 1.2620 level downwards, with targets at 1.2513 and 1.2440. Only one buying signal is possible today – a consolidation above 1.2620. The target is 1.2720.
The material has been provided by InstaForex Company – www.instaforex.com
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