GBP/USD
The GBP/USD currency pair, unlike the EUR/USD pair, continued to trade in different directions last week. Buyers have reached the resistance area of 1.2636-1.2660 four times and the pair rebounded each time, starting a new round of corrective movement. Therefore, for now we can conclude that the bulls clearly lack the strength and desire for the British currency's growth. However, as we mentioned in the fundamental articles on the pound, this currency could have already exhausted its growth potential, and it continues to fall in price against the dollar in the long term. Thus, the next round of upward movement can be completed. Moreover, a downward trend line was formed, which now supports the bears, who also still doubt the feasibility of active sales of the pair and can not overcome the strong Senkou Span B line.
GBP/USD 15M
Both linear regression channels continue to be directed downward on the 15-minute timeframe, which in principle corresponds to the general trend that has developed on the higher chart. The latest COT report showed minimal changes compared to the previous one. The British currency mainly continued to strengthen until July 14 (the final date of the report), so it is not surprising that non-commercial traders (professional players) continued to open 2,811 Buy-contracts. The "Non-commercial" category of traders only opened 182 contracts for sale (even less a week earlier). However, we can not say that the pound is rampant in price and must continue this process. Rather, even the bullish mood is slightly weakening, which can be seen both from the technical picture and from the behavior of the "commercial" category, which actively reduced Buy-contracts. Thus, the latest COT report makes it possible to complete the upward movement on the pound/dollar pair.
As for the fundamental background for the GBP/USD pair, it did not change much over the weekend. We have repeatedly said that the most likely reason for the pound's growth in recent weeks were several types of crisis in the US. In particular, it is epidemiological, which can have a very negative impact on the country's economy. So the coronavirus situation in the United States has not changed. Anti-records continue to be set for the number of new cases of the disease, some states continue to strengthen quarantine measures, and US President Donald Trump refuses to enter the country into a new lockdown, believing that this will bury the American economy. We must pay tribute to Trump. According to the latest information, he canceled rallies dedicated to his election campaign, and is going to hold telephone meetings and communicate with his voters. Well, whether Trump himself wanted it or not, this is clearly the right decision for a country where 70,000 new COVID-2019 diseases are registered every day. There is no news in the UK at all at the moment. Several extremely important reports were published last week, but traders ignored them, and in themselves reflected far from the best state of the economy. Market participants are still more interested in negotiations with Brussels and the prospects of signing a trade agreement.
There are two main scenarios as of July 20:
1) The outlook for the bulls continues to deteriorate. The pair's purchases are still not relevant at this time, since a downward trend line is already supporting the bears. Thus, you are advised to buy the pound, but not before overcoming this trend line with the first goal of the resistance area of 1.2636-1.2660, and with further goals of 1.2705 and 1.2791. Potential Take Profit in this case will be from 40 to 170 points.
2) Sellers are advised to consider short positions with the goals of the support area of 1.2404-1.2424 and the support level of 1.2375. However, you are advised to wait until the Senkou Span B line (1.2514) has been passed, from which the pair has rebounded several times. Sellers clearly have more prospects than the buyers now. The pound began to experience problems when trying to attempt growth. Potential Take Profit ranges from 60 to 110 points.