GBP/USD – 1H.
Hello, traders! According to the hourly chart, the pound/dollar pair continues the process of falling after it closed for the second time under the upward trend corridor. I have built a new downward trend corridor, which clearly now shows the "bearish" mood of traders. By and large, after several weeks of growth, we now see a correction, which may also continue until the end of the week. The news calm applies now to the pound/dollar pair. Most of all, traders are now interested in the process of negotiating an agreement that will take effect after the UK officially leaves the European Union. However, the fact is that no agreement will be signed in the near future, and both sides continue to show that they are extremely far from consensus. Moreover, Boris Johnson and Michael Gove have repeatedly stated that, despite the coronavirus epidemic, London is not considering extending the transition period. Thus, on July 1, the parties will announce that all formalities will be completed on December 31, and Britain will no longer be a member of the European Union and will not have any agreements and agreements with Brussels.
GBP/USD – 4H.
On the 4-hour chart, the pound/dollar pair also continues the process of falling in the direction of the corrective level of 50.0% (1.2444). Fixing the pair's exchange rate below this level will work in favor of continuing the fall of quotes in the direction of the next corrective levels of 1.2358 and 1.2250. The rebound of the pair rate from any Fibo level will allow traders to count on a reversal in favor of the British currency and some growth in quotes. However, in general, I believe that bear traders will continue to make up for the lost time in recent weeks.
GBP/USD – Daily.
On the daily chart, the pair's quotes fell to the corrective level of 50.0% (1.2462). Thus, closing under it will work in favor of a further fall in the direction of the next Fibo level of 38.2% (1.2215).
GBP/USD – Weekly.
On the weekly chart, the pound/dollar pair performed a false breakdown of the lower trend line and rebound from it. Thus, until the pair's quotes are fixed under this line, there is a high probability of growth in the direction of two downward trend lines.
Overview of fundamentals:
On Friday, the UK released reports on GDP and industrial production. Both were significantly weaker than the already weak forecasts. Each indicator fell by more than 20% in April. Thus, it was physically difficult for the Briton to grow up on this day.
News calendar for the US and UK:
On June 15, the calendars of economic events in the UK and the US are empty. Thus, there is no information background for the pound/dollar pair today.
COT (Commitments of Traders) report:
Last Friday, a new COT report was released, which showed a strong reduction in short contracts among the "Non-commercial" group. This same group of major traders opened 705 long contracts, but in total it turns out that they did not buy the British currency, but increased demand for it by reducing the number of sales of this currency. The "Commercial" group, which is less important, on the contrary, got rid of purchases of the pound, but at the same time getting rid of short contracts. In total, the number of long contracts and the number of short contracts decreased during the reporting week. The Briton continues to enjoy very dubious and weak interest among major players. However, this still allows it to grow from time to time, as it has in the past two weeks. Given the fact that speculators did not increase purchases of the British currency, I do not believe that it will continue its growth.
Forecast for GBP/USD and recommendations to traders:
I recommend selling the pound with the goals of 1.2444 and 1.2358, as it was secured under the level of 38.2% on the 4-hour chart. I recommend that you consider new purchases of the pair no earlier than the closing of quotes above the trend corridor on the hourly chart.
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 to ensure current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.
