29.09.202010:24 Forex Analysis & Reviews: GBP/USD. September 29. COT report. Negotiations have resumed, the parties are full of optimism, and no one wants to give in

GBP/USD – 1H.

According to the hourly chart, the GBP/USD pair quotes rose to the corrective level of 76.4% (1.2928), rebounded from it, fell to the Fibo level of 50.0% (1.2840), and after a while returned to it again. Thus, the rebound of quotes from this level allows bull traders to count on a new growth process in the direction of the levels of 1.2879 and 1.2928. Fixing the rate under the Fibo level of 50.0% will work in favor of the British dollar and its further growth towards the levels of 38.2% and 23.6%. Both sides of Brexit negotiations are still unwilling to make concessions on key issues, such as fishing in British waters, which prevents them from moving forward in negotiations. Nevertheless, every week or two, another round of negotiations begins. This week was no exception. This time, the negotiations will be attended by Michael Gove from the British government and Vice-President of the European Commission Maros Sefcovic. The parties are again full of optimism. London says that a deal is quite achievable before the end of October. Michel Barnier believes that it is still possible to get out of the current situation with a deal. However, none of the parties showed any desire to concede and did not explain why the deal can still be concluded. Moreover, today, there will be a vote in the British Parliament for the bill "on the internal market" that violates the previous agreement with the EU on Brexit. According to many, it will be accepted.

GBP/USD – 4H.

On the 4-hour chart, the GBP/USD pair performed a reversal in favor of the British currency, after the formation of a bullish divergence in the MACD indicator, and anchored above the downward trend corridor. Thus, the mood of traders changed to "bullish", and the pair's quotes rose to the corrective level of 50.0% (1.2867). The rebound of quotes from this level will allow traders to expect a slight drop in the direction of the level of 1.2720. Closing above 50.0% will increase the probability of further growth of the pair.

GBP/USD – Daily.

On the daily chart, the pair's quotes performed a reversal in favor of the British and fixed above the corrective level of 76.4% (1.2776). Thus, the growth process can be continued in the direction of the corrective level of 100.0% (1.3199). The 4-hour chart also supports the growth process.

GBP/USD – Weekly.

On the weekly chart, the pound/dollar pair closed under the lower downward trend line, thus, a false breakout of this line followed earlier. The pair returns to a downward trend.

Overview of fundamentals:

There were no important news or economic reports in the UK and America on Monday. However, traders traded the pair very well and without an informational background.

News calendar for the US and UK:

US - consumer confidence indicator (14:00 GMT).

On September 29, the calendars of economic events in the UK and America are almost empty. The information background may be completely absent today. However, do not forget about the important information that can come from the negotiations between the EU and Britain.

COT (Commitments of Traders) report:

The latest COT report on the pound that was released last Friday turned out to be boring and uninteresting. The "Non-commercial" group of traders closed approximately 2,000 long and short contracts in the reporting week, thus, its mood has not changed much. Other groups have less influence on the market. However, I note the fact that both the "Non-commercial" group and the "Commercial" group now have almost complete equality in the volumes of long and short contracts. Even the total number of currently open contracts for all groups in the market is almost equal. This rarely happens. The last report generally does not allow me to draw any important conclusions about future possible changes.

Forecast for GBP/USD and recommendations for traders:

I recommend selling the British currency with a target of 1.2720 if the rebound from the level of 50.0% (1.2867) on the 4-hour chart is completed. I recommend opening purchases of the British dollar after fixing above the level of 50.0% (1.2867) with the goal of 1.3010.

Terms:

"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.

"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy currency, not for speculative profit, but for current activities or export-import operations.

"Non-reportable positions" - small traders who do not have a significant impact on the price.