GBP/USD – 1H.
Hello, traders! According to the hourly chart, the quotes of the pound/dollar pair performed a new reversal in favor of the US currency and anchored under the upward trend corridor. Thus, the mood of traders at the moment is characterized as "bearish". Thus, the process of falling quotes can be continued. Meanwhile, I can note that the background information in yesterday's change in the mood of traders did not have almost any significance. Because the background from the UK was not there yesterday, and the news that has been coming in recent weeks from the US can only create pressure on the dollar, but not cause it to grow. Thus, either today or tomorrow, the growth of the British dollar will resume (since there was no news from the UK, and the nature of the news has not changed in the US), or traders have already had enough of selling the dollar and will now take a pause in this process for some time. Much will also depend on what news comes from both countries this week. There may be new information about the negotiations between London and Brussels. Perhaps the epidemiological situation in the United States will improve a little.
GBP/USD – 4H.
On the 4-hour chart, the pound/dollar pair performed a reversal in favor of the US currency and resumed the process of falling towards the corrective level of 38.2% (1.2530). The pair's rebound from this level will work in favor of the British currency and resume growth in the direction of the corrective level of 23.6% (1.2637). Closing quotes at these levels will increase the probability of further falls in the direction of the next Fibo level of 50.0% (1.2444).
GBP/USD – Daily.
On the daily chart, the pair's quotes secured above the corrective level of 61.8% (1.2516). Thus, the growth process can be continued in the direction of the Fibo level of 76.4% (1.2776). However, this option no longer supports the hourly chart.
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:
There was no major news or economic report in the UK and US on Monday. All the most important news is now reduced to reports about the epidemic in America, as well as about the actions and statements of Donald Trump regarding this problem.
The economic calendar for the US and the UK:
UK - change in GDP (06:00 GMT).
UK - change in industrial production (06:00 GMT).
US - consumer price index (12:30 GMT).
On July 14, the UK has already released a report on GDP for May, which grew by 1.8% over the month, although traders expected +5%. Industrial production in May increased by 6%, which was expected by traders. So the pound can continue to fall today. And for the pair today, only the US inflation report remains interesting.
COT (Commitments of Traders) report:
The latest COT report again showed an increase in the number of long contracts among the "Non-commercial" group. However, if the last report also showed a strong increase in short contracts, the report for July 7 showed that speculators opened only 12 short contracts in a week. Thus, if you try to track the trend, since the beginning of June, speculators are increasing long, but the number of short-contracts in their hands has decreased over the same period of time by 4 thousand. On the face of the "bullish" trend, which completely coincides with what is happening in the market. At the same time, the total number of both groups of contracts for the reporting week decreased by 18 thousand, mainly due to the "Non-commercial" group, which actively got rid of both groups of contracts.
Forecast for GBP/USD and recommendations to traders:
I recommend selling the pound again today with a target of 1.2444, if the close is made below the level of 1.2530 on the 4-hour chart. I recommend opening purchases of the pair with the goal of 1.2637, if the rebound from the level of 1.2530 is made.
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.
