GBP/USD – 1H.
Hello, traders! On the hourly chart, the quotes of the GBP/USD pair performed a new reversal in favor of the US currency and began a new process of falling in the direction of the lower line of the downward trend corridor, which defines the current mood of traders as "bearish". Yesterday, the attention of traders was shifted towards the European Central Bank and its meeting, however, during the day, the British currency moved identically to the euro. Quite a strange reaction from traders. Economic reports from America did not make any impression on traders. But from the United States, a new discouraging news about the coronavirus pandemic came. Over the past day, 77 thousand new cases of the disease were recorded in the country, as well as almost 1000 deaths. This is an absolute anti-record, and I can only conclude that the epidemic in the United States is not abating, but only growing like a snowball. Thus, in the near future, traders can start selling the US currency again, since in the current epidemiological situation, it is very difficult to look with optimism into the future and expect a rapid and complete recovery of the economy. Now the main thing is that most states do not close again for quarantine, although at least three have already imposed strict restrictions.
GBP/USD – 4H.
On the 4-hour chart, the GBP/USD pair performed a fall to the corrective level of 38.2% (1.2530) and an unsuccessful attempt to consolidate under. Thus, the rebound from this level allows us to count on a reversal in favor of the British and some growth in the direction of the Fibo level of 23.6% (1.2637). Closing the pair's exchange rate under the corrective level of 38.2% will increase the chances of a further fall towards the next Fibo level of 50.0% (1.2444).
GBP/USD – Daily.
On the daily chart, the pair's quotes secured above the corrective level of 61.8% (1.2516). Thus, the growth process can be continued in the direction of the Fibo level of 76.4% (1.2776). However, this option no longer supports the hourly chart.
GBP/USD – Weekly.
On the weekly chart, the pound/dollar pair performed a false breakdown of the lower trend line and rebound from it. Thus, until the pair's quotes are fixed under this line, there is a high probability of growth in the direction of two downward trend lines.
Overview of fundamentals:
On Thursday, the UK released reports on the unemployment rate (3.9%), the number of applications for unemployment benefits (-28.1 thousand) and the change in the level of average earnings (-0.3% 3M/y, +0.7% 3M/y). In general, the statistics were good, but traders did not pay any attention to it. Bank of England Governor Andrew Bailey did not say anything interesting at his speech.
News calendar for the US and UK:
UK - Bank of England Governor Andrew Bailey will deliver a speech (10:00 GMT).
US - consumer sentiment index from the University of Michigan (14:00 GMT).
Another speech by the Governor of the Bank of England is scheduled for July 17 in the UK. The American report is only one and not the most important and interesting.
COT (Commitments of Traders) report:
The latest COT report again showed an increase in the number of long-term contracts among the "Non-commercial" group. However, if the last report also showed a strong increase in short contracts, the report for July 7 showed that speculators opened only 12 short contracts in a week. Thus, if you try to track the trend, since the beginning of June, speculators are increasing long, but the number of short-contracts in their hands has decreased over the same period of time by 4 thousand. On the face of the "bullish" trend, which completely coincides with what is happening in the market. At the same time, the total number of both groups of contracts for the reporting week decreased by 18 thousand, mainly due to the "Non-commercial" group, which actively got rid of both groups of contracts.
Forecast for GBP/USD and recommendations to traders:
I recommend selling the pound again with a target of 1.2444, if the close is made below the level of 1.2530 on the 4-hour chart. I recommend opening purchases of the pair with the goal of 1.2637, if the rebound from the level of 1.2530 is made.
Terms:
"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.
"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy currency, not for speculative profit, but to ensure current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.