GBP/USD – 1H.
Hello, traders! On the hourly chart, the quotes of the GBP/USD pair continue the growth process exactly inside the ascending trend corridor. Thus, the "bullish" mood of traders is completely preserved. I do not recommend opening sales of the pair before closing quotes under the trend corridor. The reasons for such a strong growth of the British pound are approximately the same as for the euro currency. The difficult situation with the epidemic in America, the difficult situation with mass riots, the difficult situation with the economy (the drop in GDP in the second quarter may be 35%). All this is keeping traders from buying the American currency. At the same time, this week's Fed meeting may give some optimism to the bears. If Jerome Powell notes no deterioration in the past month. Also, Treasury Secretary Steven Mnuchin can add a positive mood as soon as he announces that a new package of assistance to the US economy has been agreed upon and accepted. However, Congress has not yet agreed on the scope of this package. Well, if the GDP in the second quarter collapses by less than 35%, this may also be regarded by traders as a positive moment. However, from my point of view, all these are weak motives for traders to buy the dollar. We need something more global. Nevertheless, after a fairly long growth of the British dollar, the fall in its quotes suggests itself.
GBP/USD – 4H.
On the 4-hour chart, the GBP/USD pair made a consolidation above the corrective level of 100.0% (1.2812), which allows traders to count on further growth of quotes in the direction of the next Fibo level of 127.2% (1.2964). Closing the pair's exchange rate under the Fibo level of 100.0% will work in favor of the US currency and resume the fall in the direction of the corrective level of 76.4% (1.2679). The mood remains bullish for traders on the 4-hour chart.
GBP/USD – Daily.
On the daily chart, the pair's quotes secured above the corrective level of 76.4% (1.2776). Thus, the growth process can be continued towards the next corrective level of 100.0% (1.3199).
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. It is in this direction that the pair's quotes continue to move in recent weeks.
Overview of fundamentals:
On Monday, the UK did not release important reports, and in the US, the report on orders for durable goods did not cause a reaction from traders.
News calendar for the US and UK:
On July 28, the news calendars of the UK and America were empty. Thus, traders should expect tomorrow, when the results of the Fed meeting will be summed up in America.
COT (Commitments of Traders) report:
The latest COT report on the pound was just as uninteresting as the previous one. However, despite the weak changes in the mood of major market players, the British pound continues to grow quite steadily. Although in the reporting week, speculators (the "Non-commercial" group) no longer opened long contracts, as a week earlier, but short ones. More precisely, it opened both groups of contracts, but short - much more by 1.5 thousand. But the "Commercial" group did not open a single new contract, getting rid of almost 5 thousand long and 2.5 thousand short. In general, almost 5 thousand shorts were opened and a small number of longs. Therefore, in some ways, the data in the COT report does not correspond to what is happening in the foreign exchange market. Hence the conclusion about a possible change in the mood of traders to "bearish" in the near future.
Forecast for GBP/USD and recommendations to traders:
I recommend selling the pound with a target of 1.2679 if the closing is performed under the trend corridor on the hourly chart. In buying the pair, I recommend staying with the target of 1.2964, since the closing was made above the levels of 1.2776 on the daily chart and 1.2812 - on the 4-hour chart.
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.