GBP/USD – 1H.
According to the hourly chart, the GBP/USD pair was trading in different directions all day on Thursday. As a result, a fall was made to the corrective level of 100.0% (1.3800). Moreover, today, the quotes can close under it. If this happens, the price drop will continue in the direction of the next level of 1.3741. A rebound from the level of 100.0% will favor the British currency and some growth in the direction of 1.3859. Traders on the British are now very excited. And the reason for this is not even economic statistics, which were plentiful in Britain this week. In the UK, the number of coronavirus cases increased from 34 thousand per day to 48 thousand this week. But next Monday, the British government is going to cancel all quarantine measures.
It could lead to an even greater spread of the virus, and Britain could plunge into a new crisis. Currently, the British government remains calm, stating that the vaccination of the population, which continues at a high pace, can stop the spread of the virus in the near future, and there will be no better time to remove all restrictions and fully open the economy. However, doctors disagree with this and recommend not to rush with abolishing the mask regime and social distancing. The number of cases of the disease is already approaching the maximum of the third wave, which was the strongest. Thus, the British dollar may fall in the near future, as the UK faces a real threat not only of a new pandemic crisis but also of a new economic crisis.
GBP/USD – 4H.
The GBP/USD pair on the 4-hour chart performed a rebound from the corrective level of 23.6% (1.3870). Thus, the fall of quotes can be continued in the direction of the Fibo level of 38.2% (1.3642). Also, a lot will depend on the level of 1.3800 on the hourly chart, from which the pair has already performed two rebounds. There are no emerging divergences in any indicator today.
Overview of fundamentals:
On Thursday, the calendars of economic events in the UK and the US contained many entries. But the pound/dollar pair has been trading in different directions all day without a definite and clear trend. Thus, it is difficult to say which report caused the reaction of traders and which did not.
News calendar for the USA and the UK:
US - change in retail trade volume (12:30 UTC).
US - consumer sentiment index from the University of Michigan (14:00 UTC).
On Friday, the calendar of economic events in the UK is empty, and an important retail trade report and an unimportant consumer sentiment index will be released in the US. Thus, the information background will be quite weak today.
COT (Commitments of Traders) report:
The latest COT report on July 7 for the British showed that the mood of the major players had changed again in favor of the bulls. During the reporting week, speculators increased 4,732 long contracts and 1,870 short contracts. Thus, the "bullish" mood of the "Non-commercial" category of traders has slightly increased. But in general, the situation continues to be very similar to the situation for the euro. The "bullish" mood of major players remains, and the advantage of open long contracts is about 1.5 times. Thus, the British dollar retains the chances of resuming growth.
Forecast for GBP/USD and recommendations to traders:
I recommend new purchases of the British with the targets of 1.3859 and 1.3906 if the pair performs a rebound from the level of 1.3800 on the hourly chart. I recommend selling the pound today if the closing is made under the level of 1.3800 on the hourly chart with the targets of 1.3741 and 1.3679.
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.
