GBP/USD – 1H.
According to the hourly chart, the GBP/USD pair tried to continue the process of falling on Friday. However, it quickly returned above the level of 1.3741, and the growth process can be resumed in the direction of the corrective level of 100.0% (1.3800). At the same time, the lack of information on Monday may lead to the fact that the pair will trade along with its level of 1.3741. The information background on Friday was very weak. At least that's what the traders decided. On this day, reports on business activity in the manufacturing and services sectors for July and a report on retail trade for June were released in the UK. All three reports could have turned out better, so they disappointed traders a little. The British dollar showed a drop of literally 30 points on these reports, and it fully recovered in the second half of the day.
There won't be a single report or event in the UK this week that deserves attention at all. Thus, on Wednesday, traders will closely monitor the results of the Fed meeting and the press conference with Jerome Powell, and there will be nothing to pay attention to until Wednesday. The fourth wave of the coronavirus epidemic in the UK is receding. Yesterday, less than 30 thousand Britons were already ill, almost twice lower than at the peak a week earlier. Vaccination of the population continues, and within the next two months, the entire adult population can receive two doses of the vaccine. Thus, the most acute problem for London now remains the unwillingness of the European Union to review the Northern Ireland Protocol, the implementation of which in its current form may lead to new unrest on the island of Ireland, and not execution – to legal proceedings and deterioration of relations with the EU. At the beginning of the week, traders are in no hurry to open deals, preferring to wait for news.
GBP/USD – 4H.
The GBP/USD pair on the 4-hour chart performed a reversal in favor of the US dollar after forming a bearish divergence at the CCI indicator. Thus, the decline in quotes can be continued at the corrective level of 38.2% (1.3642). There are no new divergences today. The rebound of the pair's exchange rate from the level of 38.2% will allow traders to count on the resumption of growth in the direction of the corrective level of 23.6% (1.3870). The breakdown of the last peak of the current divergence will increase the probability of resuming growth.
Overview of fundamentals:
On Friday, the calendar of economic events in the UK contained several important entries and the US calendar. But traders paid very little attention to these reports, so the influence of the information background was weak.
News calendar for the United States and the United Kingdom:
On Monday, the calendars of economic events in the United Kingdom and the United States are empty. Thus, today traders will have absolutely nothing to pay their attention to.
COT (Commitments of Traders) report:
The latest COT report on July 20 for the British showed that the mood of major players continues to become more "bearish." In the reporting week, speculators increased 11,642 short contracts and got rid of 1,157 long contracts. The total number of contracts among all categories of traders is already almost the same – 182,000 each. The number of short contracts in the "Non-commercial" category of traders is already higher than long. Thus, judging by the COT reports, there is a global trend change for the British dollar. However, the British dollar itself is not too eager to go down, but at the same time, it retains the chances of falling to the corrective level of 1.3513 (100.0% on the daily chart).
GBP/USD forecast and recommendations for traders:
Today, it is recommended to buy the British dollar if there is a rebound from 1.3741 with a target of 1.3800 on the hourly chart. It is recommended to sell the pound if the closing is made under 1.3741 on the hourly chart with a target of 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.
