GBP/USD – 1H.
Hello, traders! On the hourly chart, the quotes of the GBP/USD pair fell to the lower border of the ascending trend corridor. Rebounding from this boundary allows traders to expect a resumption of the growth process. The current mood of traders continues to be characterized as "bullish". At the same time, there is still no information background from the UK. Traders are waiting for the Bank of England meeting this week, however, it is unlikely that serious and important decisions will be made at it. This meeting will be designed to answer the question whether the Central Bank is going to introduce negative rates in the near future, which has been talked about and rumored for several months. If so, then traders will have another reason to sell off the pound. I believe that bull traders need time now to decide whether new purchases of the British are appropriate, given the not very favorable economic situation in the UK itself. It looks like the pair's quotes will close under the corridor today. It turns out that a few weeks before, traders were actively working on information from America, but now it may become insignificant for some time. Traders simply have already worked it out.
GBP/USD – 4H.
On the 4-hour chart, the GBP/USD pair rebounded from the corrective level of 161.8% (1.3157) and turned in favor of the US currency, starting the process of falling towards the corrective level of 127.2% (1.2964). However, the bullish divergence of the CCI indicator and the lower border of the trend corridor on the hourly chart stopped this process. Now only the closing of quotes under the last low of divergence will allow us to expect a further fall of the pair.
GBP/USD – Daily.
On the daily chart, the pair's quotes performed an increase to the corrective level of 100.0% (1.3199), but the rebound from the level of 161.8% on the 4-hour chart stopped the growth process. Thus, now it is possible to drop quotes. Closing the pair's rate above the 100.0% level will work in favor of further growth in the direction of the Fibo level of 127.2% (1.3684).
GBP/USD – Weekly.
On the weekly chart, the pound/dollar pair performed an increase to the lower downward trend line. The rebound from this line may allow the pair to perform a reversal in favor of the US dollar and resume the process of falling in the direction of the lower trend line, that is, approximately to the level of 1.1500.
Overview of fundamentals:
On Monday, the UK released only a report on business activity in the manufacturing sector, which was slightly worse than traders' expectations. The US ISM index, on the contrary, exceeded traders' expectations.
The economic calendar for the US and the UK:
On August 4, the US and UK news calendars do not contain anything interesting.
COT (Commitments of Traders) report:
The latest COT report on the pound was quite interesting and unexpected. It turned out that during the reporting week, the group "Non-commercial" did not increase long-contracts, but on the contrary, got rid of them, which is very strange, given the confident and strong growth of the British pound, which continued after July 28. However, the reported data shows a drop in interest among major players in the British. Moreover, the same group of traders opened 2704 short-contracts, so in general it turns out that the interest of speculators in the pound fell by about 10 thousand contracts. Given that there are only 38 thousand long and twice as many short contracts left in the hands of speculators, I can assume that a strong drop in the British dollar's quotes is possible in the near future.
Forecast for GBP/USD and recommendations to traders:
I recommend selling the pound with the goals of 1.2964 and 1.2812, if the closing is performed under the trend corridor on the hourly chart. I recommend buying the British currency again if the quotes close above the level of 1.3157 with the goals of 1.3200 - 1.3250.
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.
