GBP/USD – 1H.
Hello, traders! On the hourly chart, the quotes of the GBP/USD pair continue to grow within the upward trend corridor, but on Friday, a reversal was made in favor of the US currency and the process of falling towards the lower border of the corridor began. Thus, the current mood of traders continues to be characterized as "bullish". Until the closing of quotes under the corridor, the mood will remain "bullish". There was almost no news from the United Kingdom last week. I can only mention another failed round of Brexit negotiations, but this information no longer surprises anyone. Thus, traders had to pay attention only to the American news, which continued to remain in the majority absolutely negative. The report on GDP in America for the second quarter caused a new barrage of criticism of American President Donald Trump, who has recently been strongly criticized for high rates of infection and death from coronavirus in the United States. Nevertheless, the White House continues to remain calm when the country continues to record 60 thousand diseases every day, and the total number of deaths has already exceeded 150 thousand, and even a few senators and congressmen have managed to get infected.
GBP/USD – 4H.
On the 4-hour chart, the GBP/USD pair rebounded from the corrective level of 161.8% (1.3157) and turned in favor of the US currency, starting the process of falling towards the corrective level of 127.2% (1.2964). Thus, before the pair closes above the Fibo level of 161.8%, it is more likely that the British dollar will fall. Fixing the pair above the corrective level of 161.8% will allow traders to expect a resumption of growth in the direction of the next Fibo level of 200.0% (1.3370).
GBP/USD – Daily.
On the daily chart, the pair's quotes performed an increase to the corrective level of 100.0% (1.3199), but the rebound from the level of 161.8% on the 4-hour chart stopped the growth process. Thus, now it is possible to drop quotes. Closing the pair's rate above the level of 100.0% will work in favor of further growth in the direction of the Fibo level of 127.2% (1.3684).
GBP/USD – Weekly.
On the weekly chart, the pound/dollar pair performed an increase to the lower downward trend line. The rebound from this line may allow the pair to perform a reversal in favor of the US dollar and resume the process of falling in the direction of the lower trend line, that is, approximately to the level of 1.1500.
Overview of fundamentals:
On Friday, the UK again did not release important reports. In America, there were several reports, but none of them can be called important.
News calendar for the US and UK:
UK - manufacturing PMI (08:30 GMT).
US - index of business activity in the manufacturing sector (13:45 GMT).
US - ISM manufacturing index (14:00 GMT).
On August 3, the news calendar of the UK contains only the index of business activity in the manufacturing sector. The same indices will be released in the US. The most important is the ISM index.
COT (Commitments of Traders) report:
The latest COT report on the pound was quite interesting and unexpected. It turned out that during the reporting week, the "Non-commercial" group did not increase long-contracts, but, on the contrary, got rid of them, which is very strange, given the confident and strong growth of the British pound, which continued after July 28. However, the data of the report shows a drop in interest among major players in the British. Moreover, the same group of traders opened 2,704 short-contracts, so in general it turns out that the interest of speculators in the pound fell by about 10 thousand contracts. Given that there are only 38 thousand long and twice as many short contracts left in the hands of speculators, I can assume that a strong drop in the British dollar's quotes is possible in the near future.
Forecast for GBP/USD and recommendations to traders:
I recommend selling the pound with a target of 1.2964, since the rebound from the level of 1.3157 was performed on the 4-hour chart. Also, to open sales, you can wait for the closing under the trend corridor on the hourly chart. I recommend buying the British currency again if the quotes close above the level of 1.3157 with the goals of 1.3200-1.3250.
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.