GBP/USD – 1H.
According to the hourly chart, the GBP/USD pair quotes continued the process of falling on Tuesday and closed at the level of 1.3859. Thus, the fall of quotes can be continued in the direction of the next corrective level of 100.0% (1.3800). A descending trend corridor characterizes the current mood of traders as "bearish." Fixing the pair's exchange rate above the corridor will work in favor of the British and the beginning of the growth of the pound/dollar pair. The information background for the Briton on Tuesday was almost completely absent. In recent days, a minimal amount of information has been coming from the UK, and most of it is related to the coronavirus. Let me remind you that several infections with a new strain of the Lambda coronavirus were detected in the UK. In addition, in recent weeks, there has been an increase in the number of diseases, which makes us worry about the pace of recovery of the British economy.
On June 28, the number of recorded cases of infection exceeded 20,000, which corresponds to the number of diseases during the beginning of the second wave in October last year and significantly exceeds the number of diseases during the entire first wave in March-April 2020. Thus, now we can talk about the third wave of the pandemic in Britain, although vaccination in the country continues rapidly. The British government expects that within the next few months, the entire adult population of the country will receive both vaccinations against the coronavirus, which will stop the further spread of the virus. However, more than half of the British population has received both doses of the vaccine at the moment. As we can see, this does not stop the epidemic. If the third wave turns out to be as large-scale as the second, this may give rise to the spread of the virus, in particular, throughout the Eurozone. Let me remind you that the United Kingdom suffered the most from the pandemic during the first and second waves of European countries.
GBP/USD – 4H.
The GBP/USD pair on the 4-hour chart performed a fall to the corrective level of 23.6% (1.3870) and closed below it. Thus, the fall in quotes can be continued in the direction of the next Fibo level of 38.2% (1.3642). The uncertainty with the coronavirus in Britain may continue to put pressure on the British.
GBP/USD – Daily.
The pair's quotes closed under an important trend line on the daily chart, which now allows traders to expect a further drop in quotes in the direction of the Fibo level of 100.0% (1.3513).
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 remain.
Overview of fundamentals:
On Tuesday, the calendars of economic events in the UK and the US were almost empty. The information background on this day was very weak.
News calendar for the USA and the UK:
UK- change in GDP (06:00 UTC).
US - change in the number of employees from ADP (12:15 UTC).
On Wednesday, the calendars of economic events in the UK and the US contain one report each, which is quite important. The information background today may be average in strength.
COT (Commitments of Traders) report:
The latest COT report from June 22 for the British showed that the mood of the major players has changed in favor of the bears. The number of long contracts closed by speculators amounted to 7 thousand. At the same time, about 10 thousand short contracts were opened. Thus, the "bearish" mood among the "Non-commercial" category of traders has intensified, which allows us to count on a further fall in the British dollar. However, the total number of long contracts concentrated in the hands of speculators still exceeds the total number of short contracts by 14 thousand (two weeks ago, the gap was two times). Thus, the Briton has not yet lost all chances of growth.
GBP/USD forecast and recommendations for traders:
I recommend new purchases of the British when closing on the hourly chart above the descending corridor with targets of 1.3906 and 1.3972. I recommend selling the pound if there is a rebound on the hourly chart from the level of 1.3859 with a target of 1.3800.
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.
