On the hourly chart, the GBP/USD pair continued to grow towards the level of 1.3011 on Monday, but this time the bulls' attack was not very convincing. No new signals were received. A rebound from the 1.3011 level will allow expecting a reversal in favor of the US dollar and some decline towards the levels of 1.2911 and 1.2892. Fixing the pair's rate above the 1.3011 level will increase the likelihood of further growth towards the next Fibonacci level of 127.2%–1.3053. The ascending trend channel continues to characterize the current trader sentiment as "bullish."
The wave situation changed last week. The last downward wave (which started forming on June 12) managed to break the low of the previous downward wave, and the new upward wave (which is still forming at the moment) managed to break the peak of the previous upward wave. Thus, we received the first sign of a trend change to "bullish" after the "bearish" one, which did not materialize. The rise of the pound may continue. I have many doubts about the stability of such a trend, but graphical analysis shows what to expect in the near future.
The informational background on Monday could create new problems for the dollar. FOMC President Jerome Powell stated that he is satisfied with the inflation progress over the past few months. He also noted that the Fed still wants to see more evidence of inflation moving toward the target level, hinting at the impracticality of lowering the interest rate until this happens. I remind you that similar rhetoric from Powell last week partially influenced the dollar's decline. The market may see optimism in Powell's speech regarding rate cuts soon, or it may see the current unpreparedness to start easing monetary policy. The question is what the market wants to see.
On the 4-hour chart, the pair reversed in favor of the British currency after four rebounded from the level of 1.2620 and then consolidated above the corrective level of 61.8%–1.2745. If you look at the 4-hour chart, there are no obstacles to further growth of the pound up to the level of 1.3044, towards which the price continues to move. Currently, the pound has good graphical growth prospects.
Commitments of Traders (COT) Report:
The sentiment of the "Non-commercial" category of traders became even more "bullish" in the last reporting week. The number of long positions held by speculators increased by 28,563 units, while the number of short positions increased by 5,914 units. Bulls still hold a solid advantage. The gap between the number of long and short positions is already 85 thousand: 135 thousand versus 50 thousand.
In my opinion, the pound still has prospects for a decline, but the COT reports and graphical analysis suggest otherwise. Over the past three months, the number of long positions has increased from 98 thousand to 135 thousand, while the number of short positions has decreased from 54 thousand to 50 thousand. I believe that over time, large players will start getting rid of long positions again or increasing short positions, as all possible factors for buying the British pound have already played out. However, one should not forget that this is just an assumption. Graphical analysis still indicates the weakness of the bears, who could not even "take" the 1.2620 level.
News Calendar for the US and the UK:
USA – Change in Retail Sales Volume (12:30 UTC).
On Tuesday, the economic event calendar contains only one entry. The impact of the informational background on market sentiment today may be very weak.
Forecast for GBP/USD and Trader Tips:
Selling the pound is possible today on a rebound from the 1.3011 level on the hourly chart or from the 1.3044 level on the 4-hour chart, targeting the lower boundary of the ascending channel. Purchases could be considered upon consolidation above the 1.2931 level with targets of 1.3011 and 1.3044. These trades can be kept open now.
The Fibonacci grids are built from 1.2036 to 1.2892 on the hourly chart and from 1.4248 to 1.0404 on the 4-hour chart.
