GBP/USD – 1H.
Hello, traders! On the hourly chart, the quotes of the GBP/USD pair continue to grow. The upward trend corridor still preserves the prospects for further growth and the "bullish" mood of traders. I have already said in previous reviews that the news from the UK is not optimistic at all. The chances of reaching an agreement on Brexit are not exactly fading, they have been zero for a long time. The parties simply declare failure after each failed round of negotiations. The UK government is calling for preparations for no deal. German Chancellor Angela Merkel believes that an agreement will not be reached. All this for the Briton threatens serious financial losses. However, it is the pound that continues to grow quite steadily. And I can conclude that traders are currently looking only at the American information background, which is really extremely weak. Perhaps this week the situation will change and the eyes of traders will turn to what is happening in Britain. Although there are no economic reports scheduled for this week in Britain. But just in America, the GDP report will be released, as well as the Fed meeting, which always causes a great deal of interest among traders.
GBP/USD – 4H.
On the 4-hour chart, the GBP/USD pair made a consolidation above the corrective level of 100.0% (1.2812), which allows traders to count on further growth of quotes in the direction of the next Fibo level of 127.2% (1.2964). Closing the pair's exchange rate under the Fibo level of 100.0% will work in favor of the US currency and resume the fall in the direction of the corrective level of 76.4% (1.2679). The mood remains bullish for traders on the 4-hour chart.
GBP/USD – Daily.
On the daily chart, the pair's quotes secured above the corrective level of 76.4% (1.2776). Thus, the growth process can be continued towards the next corrective level of 100.0% (1.3199).
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. It is in this direction that the pair's quotes continue to move in recent weeks.
Overview of fundamentals:
On Friday, the UK released reports on retail sales for June (-13.9% m/m and -1.6% y/y) and business activity indices in the services sector (56.6) and the manufacturing sector (53.6). In general, the data turned out to be stronger than traders' expectations, which could contribute to the growth of the British dollar. News from the US was weaker.
News calendar for the US and UK:
US - change in the volume of orders for long-term goods (12:30 GMT).
On July 25, the news calendar of the UK is empty. In America, there is one fairly important report on orders for durable goods.
COT (Commitments of Traders) report:
The latest COT report on the pound was just as uninteresting as the previous one. However, despite the weak changes in the mood of major market players, the British pound continues to grow quite steadily. Although in the reporting week, speculators (the "Non-commercial" group) no longer opened long contracts, as a week earlier, but short ones. More precisely, it opened both groups of contracts, but short - much more by 1.5 thousand. But the "Commercial" group did not open a single new contract, getting rid of almost 5 thousand long and 2.5 thousand short. In general, almost 5 thousand shorts were opened and a small number of longs. Therefore, in some ways, the data in the COT report does not correspond to what is happening in the foreign exchange market. Hence the conclusion about a possible change in the mood of traders to "bearish" in the near future.
Forecast for GBP/USD and recommendations to traders:
I recommend selling the pound with a target of 1.2679, if the closing is performed under the trend corridor on the hourly chart. I recommend opening new purchases of the pair with a target of 1.2964, since the closing was made above the levels of 1.2776 on the daily chart and 1.2812 (on the 4-hour 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.
