GBP/USD. October 6th. The pound is struggling to move higher, lacking news support
October 6, 2023 12:22 pm
On the hourly chart, the GBP/USD pair rebounded from the level of 1.2112 on Thursday and rose above the level of 1.2175 and above the descending trend corridor. Thus, I can assume that the “bearish” trend is over. This does not mean that we will see a new rise in the British currency today. Today, there may well be a new decline in the pound, but the fact that it closed above the descending trend corridor suggests that the pound may show growth in the coming weeks. Today, closing below the level of 1.2175 will allow traders to expect a new decline towards the levels of 1.2112 and 1.2039, and a rebound from this level will lead to further growth towards the Fibonacci level of 161.8%–1.2250.
Despite the ongoing growth process, the upward wave has not yet fully formed, and its peak is incomplete and still below the peak of the previous wave. There is also no new downward wave at the moment, so there are no signs of the “bearish” trend ending.
The “bearish” trend may well continue if today’s reports on the US labor market and unemployment please dollar bulls. And they can do that. As for the UK and its statistics, this week saw three business activity indices, each of which was far from its ideal value. Next week, there will be more important data, but the market’s attention will again be shifted towards the US, as there will be a report on inflation for September. The indicator may show an acceleration for the third month in a row, practically guaranteeing a 0.25% increase in the FOMC interest rate in November.
On the 4-hour chart, the pair made a turnaround in favor of the British currency after the formation of a “bullish” divergence on the RSI indicator. The growth process can continue towards the Fibonacci level of 50.0%–1.2289, but more accurate benchmarks should be sought on the hourly chart now. I advise you to analyze it more carefully. On the 4-hour chart, the “bearish” sentiment persists and is unlikely to change in the near future. There are no impending divergences today.
Commitments of Traders (COT) report:
The sentiment in the “non-commercial” trader category has become less “bullish” again during the last reporting week. The number of long contracts held by speculators decreased by 345 units, while the number of short contracts increased by 17,669 units. The overall sentiment of major players remains bullish, and the gap between the number of long and short contracts narrows every week; now it’s 85,000 versus 69,000. In my view, the pound had good prospects for further growth two months ago, but now many factors have turned in favor of the US dollar. I do not expect a strong rally in the pound in the near future. I believe that over time, bulls will continue to liquidate their buy positions, as was the case with the European currency.
News Calendar for the US and the UK:
US – Average Hourly Earnings (12:30 UTC).
US – Nonfarm Payrolls (12:30 UTC).
US – Unemployment Rate (12:30 UTC).
On Friday, the economic events calendar includes three important entries. The impact of the news background on market sentiment today can be very significant.
GBP/USD Forecast and Trading Advice:
Selling the pound was possible on a rebound from the level of 1.2250, with targets at 1.2175, 1.2112, and 1.2039 on the hourly chart. All targets have been reached. I advised considering buying in case of a rebound from the level of 1.2039, with targets at 1.2112 and 1.2175. Both targets have been reached. At present, you can stay in long positions with targets at 1.2250 and 1.2342 until closing below 1.2175 or sell in case of closing below 1.2175 with targets at 1.2112 and 1.2039.
The material has been provided by InstaForex Company – www.instaforex.com
On the hourly chart, the GBP/USD pair rebounded from the level of 1.2112 on Thursday and rose above the level of 1.2175 and above the descending trend corridor. Thus, I can assume that the “bearish” trend is over. This does not mean that we will see a new rise in the British currency today. Today, there may well be a new decline in the pound, but the fact that it closed above the descending trend corridor suggests that the pound may show growth in the coming weeks. Today, closing below the level of 1.2175 will allow traders to expect a new decline towards the levels of 1.2112 and 1.2039, and a rebound from this level will lead to further growth towards the Fibonacci level of 161.8%–1.2250.
Despite the ongoing growth process, the upward wave has not yet fully formed, and its peak is incomplete and still below the peak of the previous wave. There is also no new downward wave at the moment, so there are no signs of the “bearish” trend ending.
The “bearish” trend may well continue if today’s reports on the US labor market and unemployment please dollar bulls. And they can do that. As for the UK and its statistics, this week saw three business activity indices, each of which was far from its ideal value. Next week, there will be more important data, but the market’s attention will again be shifted towards the US, as there will be a report on inflation for September. The indicator may show an acceleration for the third month in a row, practically guaranteeing a 0.25% increase in the FOMC interest rate in November.
On the 4-hour chart, the pair made a turnaround in favor of the British currency after the formation of a “bullish” divergence on the RSI indicator. The growth process can continue towards the Fibonacci level of 50.0%–1.2289, but more accurate benchmarks should be sought on the hourly chart now. I advise you to analyze it more carefully. On the 4-hour chart, the “bearish” sentiment persists and is unlikely to change in the near future. There are no impending divergences today.
Commitments of Traders (COT) report:
The sentiment in the “non-commercial” trader category has become less “bullish” again during the last reporting week. The number of long contracts held by speculators decreased by 345 units, while the number of short contracts increased by 17,669 units. The overall sentiment of major players remains bullish, and the gap between the number of long and short contracts narrows every week; now it’s 85,000 versus 69,000. In my view, the pound had good prospects for further growth two months ago, but now many factors have turned in favor of the US dollar. I do not expect a strong rally in the pound in the near future. I believe that over time, bulls will continue to liquidate their buy positions, as was the case with the European currency.
News Calendar for the US and the UK:
US – Average Hourly Earnings (12:30 UTC).
US – Nonfarm Payrolls (12:30 UTC).
US – Unemployment Rate (12:30 UTC).
On Friday, the economic events calendar includes three important entries. The impact of the news background on market sentiment today can be very significant.
GBP/USD Forecast and Trading Advice:
Selling the pound was possible on a rebound from the level of 1.2250, with targets at 1.2175, 1.2112, and 1.2039 on the hourly chart. All targets have been reached. I advised considering buying in case of a rebound from the level of 1.2039, with targets at 1.2112 and 1.2175. Both targets have been reached. At present, you can stay in long positions with targets at 1.2250 and 1.2342 until closing below 1.2175 or sell in case of closing below 1.2175 with targets at 1.2112 and 1.2039.
The material has been provided by InstaForex Company – www.instaforex.com
Related Posts: