GBP/USD – 1H.
According to the hourly chart, the GBP/USD pair performed a rebound from the corrective level of 23.6% of the small Fibo grid yesterday and a slight increase to the previous day's peak. However, the growth process ended very quickly, and a reversal has already been made in favor of the US currency, and the process of returning to the level of 23.6% (1.3884) has begun. I also note that throughout the current week, the pound/dollar quotes are located slightly above the level of 1.3884, so it makes sense to talk about a sideways corridor. Yesterday, the Bank of England meeting and the speech of Governor Andrew Bailey should have brought traders out of their stupor. However, the British regulator itself was very disappointed. Of course, no one expected the regulator to raise the rate or reduce the asset repurchase program from the current 895 billion pounds. However, there were some hopes for an increase in hawkish rhetoric from Andrew Bailey or hopes for an increase in the number of votes to reduce the QE program.
Andrew Bailey was again as restrained as possible. He said that the main goal of the regulator at this time is to stimulate the fastest possible return of Britons to work after the employer support programs that kept the country from a wave of mass layoffs due to the crisis and pandemic will cease in September. The issues of inflation and tightening of monetary policy are not currently facing the Bank of England. However, according to the assurances of some experts, inflation may rise to 4% by the end of the year. Thus, now all hope this week is only for American Nonfarm. If they are strong, the pair may return to the level of 23.6%, near which all trades are held this week. If the Nonfarm is weak, the pair may try to increase the corrective level of 0.0% (1.3981).
GBP/USD – 4H.
The GBP/USD pair on the 4-hour chart performed a new fall to the corrective level of 23.6% (1.3870). The formation of a bullish divergence at the CCI indicator and two rebounds from this level allow us to count on the resumption of growth in the direction of 1.4003. However, closing the pair's exchange rate under the corrective level of 23.6% will work in favor of the US currency and continue falling in the direction of the Fibo levels of 38.2% and 23.6% on the small Fibo grid (1.3829 and 1.3729).
News calendar for the US and UK:
US - unemployment rate (12:30 UTC).
US - change in the number of people employed in the non-agricultural sector (12:30 UTC).
US - change in the average hourly wage (12:30 UTC).
On Friday, all the day's main events will be associated with American reports. There is no single important entry in the calendar of economic events for this day in the UK. However, the information background will be strong today even without British news.
COT (Commitments of Traders) report:
The latest COT report on July 27 for the British showed that the mood of major players remains "bearish." During the reporting week, speculators closed 1,485 short contracts and opened 429 long contracts. As we can see, the changes are small, but the mood has become a little more "bullish." At the moment, the total number of contracts among all categories of traders is almost the same: 180-182 thousand each. The number of short contracts in the "Non-commercial" category of traders is also approximately equal to that of long contracts. Thus, judging by the COT reports, there is a global trend change for the British dollar, but at the same time, the full balance is maintained at this time. However, the pound is still more inclined to grow, and the chances of a new strong fall are purely theoretical. In the near future, major players may start repurchasing the pound.
GBP/USD forecast and recommendations for traders:
Yesterday, I recommended buying the pair if there is a rebound from the level of 1.3884 on the hourly chart with targets of 1.3909 and 1.3989. Today, these positions should be maintained until closing below the level of 1.3909. I recommend selling the pound today if the closing is made under the level of 1.3884 on the hourly chart with the target of 1.3830.
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 ensure current activities or export-import operations.
"Non-reportable positions" are small traders who do not have a significant impact on the price.