GBP/USD – 1H.
Hello, traders! According to the hourly chart, the pound/dollar pair, similar to the euro/dollar pair, performed a reversal in favor of the British currency and began the growth process after fixing over the downward trend corridor. Thus, we can conclude that the mood of traders has changed again to "bullish", and all the fault of the newly fallen demand for the US dollar. Thus, it is likely that major market players continue to get rid of the US currency or, less likely, open long-term contracts for the British currency. The reasons for this behavior of traders are now as difficult to talk about as in the case of the euro/dollar pair. Demand for the dollar is falling, this is clear, but it is very difficult to talk about the prospects at this time. The British have a huge number of problems now, and at any moment it can resume falling since it is still completely unclear whether Brussels and London will agree on an agreement that will significantly facilitate their interaction after Brexit. The media from time to time receives information that the parties seem ready to make some concessions in the negotiation process, but there has been no official information. Therefore, all this is now from the category of rumors.
GBP/USD – 4H.
On the 4-hour chart, the pound/dollar pair also performed a reversal in favor of the British currency and anchored above the Fibo level of 23.6% (1.2637). Thus, the growth process can be continued in the direction of the next corrective level of 0.0% (1.2811). On June 16, a bearish divergence is brewing for the CCI indicator, which also allows traders to count on a reversal in favor of the US currency and a resumption of the fall in the direction of the Fibo levels of 38.2% (1.2530) and 50.0% (1.2444). Fixing the pair's exchange rate under the corrective level of 23.6% will similarly work in favor of the beginning of a fall in quotes.
GBP/USD – Daily.
On the daily chart, the pair's quotes fell to the corrective level of 50.0% (1.2462) and rebounded from it. Thus, traders can now expect growth in the direction of the corrective level of 61.8% (1.2711), but more important is the 4-hour chart, where a bearish divergence is brewing.
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 Monday, no important or interesting information was released in the UK or the US. Nevertheless, traders found reasons and reasons for new purchases of the pound/dollar pair.
News calendar for the US and UK:
UK - change in the number of applications for unemployment benefits (06:00 GMT).
UK - unemployment rate (06:00 GMT).
UK - change in average earnings (06:00 GMT).
US - change in retail trade volume (12:30 GMT).
US - change in industrial production (13:15 GMT).
US - Federal Reserve Board of Governors Chairman Jerome Powell will deliver a speech (14:00 GMT).
On June 16, the calendars of economic events in the UK and the US are full of important statistics. In the UK, reports have already been released on the unemployment rate (down to 3.9%) and applications for unemployment benefits (+530 thousand). However, the pound on Tuesday morning shows a tendency to fall.
COT (Commitments of Traders) report:
Last Friday, a new COT report was released that showed a strong reduction in short contracts among the "Non-commercial" group. This same group of large 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 British dollar with the goals of 1.2530 and 1.2444 if a new consolidation is made under the level of 23.6% (1.2637) on the 4-hour chart. I do not recommend considering new purchases of the pair yet due to the brewing bearish divergence.
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.
