GBP/USD – 1H.
According to the hourly chart, the GBP/USD pair quotes on Friday performed a fall to the corrective level of 100.0% (1.3800). They fell by another 120 points. Such a strong drop in the British dollar is already surprising since the grounds for this movement were much weaker. Let me remind you that it all started on Wednesday morning when the Fed summed up the results of the next meeting. However, no important changes were made in the rhetoric or monetary policy. Nevertheless, traders are selling the British currency for the fourth day in a row, as if the Fed announced the end of the QE program yesterday and a rate increase of several percent.
On Friday, the information background was weak, preventing the British dollar from falling by 120 points. Retail trade in the UK in May showed a weaker result than traders expected to see. The report showed a decline of 1.4%, although traders anticipated growth of 1.6-2.1% m/m. And there were no other significant events or reports on Friday. From my perspective, it is now essential to wait for the market to calm down a little and come back to normal. I think the current drop in quotes is not entirely justified. Let me remind you that before this movement, the pair's quotes were inside the sideways trend corridor for about a month, although there were also economic reports and important events at that time.
Nevertheless, for a whole month, traders did not find any reason for the trend. But, then, the far from the most important meeting of the Fed suddenly caused a drop of 300 points. Moreover, at the moment, it continues.
GBP/USD – 4H.
The GBP/USD pair on the 4-hour chart performed a consolidation under the upward trend corridor, which allows traders to count on the continuation of the fall, as the quotes also performed a close under the level of 1.3870. However, the fall was caused by a significant event (the Fed meeting), and already the reaction to it looks excessive. Therefore, I do not think that the probability of further growth of the US currency is high. Nevertheless, the fall in quotes may continue in the direction of 38.2% (1.3642).
GBP/USD – Daily.
On the daily chart, the pair's quotes also closed under an important trend line, allowing traders to now expect a further drop in quotes in the direction of the Fibo level of 100.0% (1.3513).
GBP/USD – Weekly.
The pound/dollar pair completed a close over the second downward trend line on the weekly chart. Thus, the chances of long-term growth of the pound remain.
Overview of fundamentals:
On Friday, traders continued to trade, based on the results of the Fed meeting. But, unfortunately, the report on retail trade in the UK only caused additional pressure on the Briton.
News calendar for the United States and the United Kingdom:
On Monday, the information background will be weak, as no economic reports will be released in the US and Britain during the day.
COT (Commitments of Traders) report:
The latest COT report from June 8 on the British pound showed that the mood of the major players has not changed. In total, speculators closed 7,000 long and short contracts during the reporting week. Thus, only the total number of contracts focused on the hands of the "Non-commercial" category of traders decreased. Moreover, they also got rid of both types of contracts in the "Commercial" and "Non-commercial" categories. Thus, all market players got rid of the contracts for the Briton. Therefore, it indicates a new drop in interest among traders in the pound. However, the mood of speculators on it remains confident "bullish," as the number of long contracts exceeds the number of short contracts twice. At the same time, you need to wait for the new COT report, which is late.
GBP/USD forecast and recommendations for traders:
Purchases of the British dollar are recommended today in the event of a rebound of quotes from the level of 100.0% (1.3800) with targets of 1.3906 and 1.3972. Conversely, it is recommended to sell the pound if the hourly chart closes below the level of 1.3800 with a target of 1.3679.
Terms:
"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.
"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy foreign currency, not for speculative profit, but to support current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.