GBP/USD – 1H.

According to the hourly chart, the quotes of the GBP/USD pair were traded in different directions all day. Thus, it is impossible to make any more or less accurate conclusions about the prospects of the pair. In general, it is the British dollar that remains the most difficult pair to trade at this time. One has only to remember how much news has been associated with the UK in recent times. It's even hard for me to conclude whether the pound has been rising or falling lately. The information background also leaves much to be desired. On the one hand, no fact speaks in favor of concluding a trade agreement between the UK and the European Union. The parties persistently cannot agree, and the draft law "on the internal market" can finally spoil relations between the countries. On the other hand, the British do not fall under the pressure of traders. Does this mean that traders still believe in the success of the negotiations? Or traders are simply more interested in events in America, where the information background is also extremely important? Recall that in the United States, the election race continues between Donald Trump, who fell ill with COVID-2019, and Joe Biden. At the same time, recent opinion polls have shown that Biden has further increased the gap from Trump, and many media outlets believe that it is the coronavirus that will finally kill all Trump's chances for a second term. Thus, the markets are now full of contradictions. The EUR/USD pair is trading in a narrow side corridor. Meanwhile, the GBP/USD pair is trading in a slightly wider side corridor (as can be seen on the 4-hour chart).

GBP/USD – 4H.

On the 4-hour chart, the GBP/USD pair fell to the corrective level of 50.0% (1.2867), rebounded from it, and turned in favor of the British pound. Thus, the growth process can be resumed in the direction of the Fibo level of 38.2% (1.3010). At the same time, trading continues between the levels of 1.2720 and 1.3010. This is the side of the corridor, which we mentioned above. If it is approximately 200-250 points for the euro, then it is 300 points for the British. That's the difference.

GBP/USD – Daily.

On the daily chart, the pair's quotes performed a rebound from the corrective level of 61.8% (1.2709) and an increase to the Fibo level of 76.4% (1.3016). Near this level, a reversal was made in favor of the US currency and the process of falling towards the corrective level of 61.8% began.

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 was no major news in the UK on Wednesday other than those related to the coronavirus epidemic. However, the information background is now so rich that it is impossible to link any one factor to the rise or fall of the British.

News calendar for the US and the UK:

US - number of primary and secondary applications for unemployment benefits (12:30 GMT).

On October 8, the UK and US calendars are almost empty again. Traders are advised to pay attention to general news: about the pandemic in the US and Britain, Trump's illness, Boris Johnson, and the negotiations between London and Brussels on the Brexit deal.

COT (Commitments of Traders) report:

The latest COT report on the British pound that was released last Friday showed a sharp increase in the number of short contracts in the "Non-commercial" category. This means that this group of traders believes that the British pound will continue to fall, although it has been growing in recent days. Now the total number of short contracts focused on the hands of speculators exceeds the total number of long contracts. Thus, we can conclude that large traders are again changing their mood to "bearish". In total, during the reporting week, all categories of traders opened approximately the same number of contracts.

Forecast for GBP/USD and recommendations for traders:

Today, I recommend buying the GBP/USD pair with a target of 1.3010, as the rebound from the corrective level of 50.0% (1.2867) was made on the 4-hour chart. Fixing quotes below the level of 50.0% will allow you to open sales with a target of 1.2720.

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.