GBP/USD – 1H.
According to the hourly chart, the GBP/USD pair quotes increased to the corrective level of 61.8% (1.3972) on Wednesday. However, they still performed a reversal in favor of the US currency and closed below the level of 61.8% at night. Thus, at the moment, the decline in quotes can be continued in the direction of the corrective level of 76.4% (1.3906). However, today at 11:00 UTC, the Bank of England will summarize the meeting results, and this event may lead to a strong increase in volatility for the pound/dollar pair. There are a lot of options that can happen in a few hours. If no important decisions are made, the pair can stay in the same place. If important decisions or statements are made, then the pair may show high volatility for a short period.
For the pound to continue the growth process, the Bank of England must declare its readiness to raise rates (even next year) or its readiness to curtail the quantitative stimulus program. For the pound to start falling, the Bank of England must announce that it is not ready to tighten monetary policy in the near future. Of course, it is impossible to predict in advance the decisions that the British regulator will make. Thus, traders will have to react to the information that will become known in a few hours. In addition, in the second half of the day, four rather important reports will be released in the United States at once. But the reaction of traders to them will depend entirely on how important decisions are made by the Bank of England. If the decisions are important and the statements are loud, no one will pay attention to the American statistics.
GBP/USD – 4H.
The GBP/USD pair on the 4-hour chart consolidated above the corrective level of 23.6% (1.3870) and increased to the level of 1.4003. The rebound of quotes from this level will allow traders to count on a reversal in favor of the US currency and a slight fall in the direction of the level of 23.6% (1.3870). Closing the pair's exchange rate above the level of 1.4003 will increase the chances of continued growth.
GBP/USD – Daily.
On the daily chart, the pair's quotes closed under an important trend line, which also now allows traders to expect a further drop in quotes in the direction of the Fibo level of 100.0% (1.3513). All charts currently predict a different direction of movement of the British pound.
GBP/USD – Weekly.
The pound/dollar pair performed a close over the second descending trend line on the weekly chart. Thus, the chances of long-term growth of the pound sterling remain.
Overview of fundamentals:
On Wednesday, the information background was very weak, as only business activity indices in the services and manufacturing sectors were released in the UK and the US.
News calendar for the United States and the United Kingdom:
UK - decision on the main interest rate of the Bank of England (11:00 UTC).
UK - votes of the members of the ILC on the main interest rate (11:00 UTC).
UK - votes of the ILC members on the planned volume of asset purchases (11:00 UTC).
UK - summary of monetary policy (11:00 UTC).
US - change in GDP volume for the quarter (12:30 UTC).
US - change in the volume of orders for long-term goods (12:30 UTC).
US - balance of foreign trade in goods (12:30 UTC).
US - number of initial applications for unemployment benefits (12:30 UTC).
On Thursday, both the UK and the US will have a large amount of important economic information. The information background will be very strong today.
COT (Commitments of Traders) report:
The latest COT report from June 15 on the British showed that the mood of the major players has changed in favor of the bulls. The number of short contracts closed by speculators exceeded the number of closed long contracts by 3,000. Nevertheless, in general, I note a drop in interest in contracts for the British and an increase in the "bullish" mood. However, this data can already be considered outdated since the most interesting events for the pound/dollar pair occurred already in those days that the latest report does not cover. Therefore, we need to wait for the next report to understand how the "Non-commercial" category of traders behaved during the collapse of the pound sterling at the end of last week.
GBP/USD forecast and recommendations for traders:
Purchases of the British dollar were recommended in the event of a rebound of quotes from the level of 100.0% (1.3800) with targets of 1.3906 and 1.3972. Both goals have been achieved. I recommend new purchases when closing above the level of 1.3972 with targets of 1.4024 and 1.4077. It is recommended to sell the pound if the hourly chart closes at 1.3972 with a target of 1.3906.
Terms:
"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.
"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy foreign currency, not for speculative profit, but to ensure current activities or export-import operations.
"Non-reportable positions" are small traders who do not have a significant impact on the price.
