FX.co ★ GBP/USD. June 10. COT report: The British pound continues to grow. Bear traders continue to rest. Will the FOMC meeting stop the dollar from falling?

GBP/USD – 1H.

Hello, traders! According to the hourly chart, the pound/dollar pair yesterday performed a consolidation under the upward trend corridor (like the euro/dollar), but later performed a reversal in favor of the British dollar and resumed the growth process (like the euro/dollar). Thus, the growth of the pair's quotes can be continued, but yesterday's sales signal turned out to be false. This once again confirms the strength of the current "bullish" mood. Graphic signals are not processed. In the UK, nothing supernatural happened yesterday either. Thus, how to explain the sharp growth of the British - it is unclear. Perhaps the reasons still lie in the dollar and America. But even in the United States, nothing interesting happened. It is unlikely that traders continue to get rid of the dollar on the basis of the fact that rallies and protests continue in America, caused by a racist scandal. Thus, the inexplicable growth of the British pound continues, and the pair's sales after yesterday should be treated with maximum caution.

GBP/USD – 4H.

As seen on the 4-hour chart, the pound/dollar pair also resumed the growth process, despite the fact that a little earlier it made a consolidation under the trend line. Thus, on this chart, traders witnessed another false signal to sell. Now the growth process is resumed in the direction of the corrective level of 127.2% (1.2803). Bearish divergence, which has been brewing for three days, does not seem to stop the growth of the British pound either. Closing the pair's quotes above the Fibo level of 127.2% will increase the chances of continuing growth towards the next corrective level of 161.8% (1.3002).

GBP/USD – Daily.

On the daily chart, the pair's quotes secured above the corrective level of 61.8% (1.2711). Thus, the growth process can be continued towards the next Fibo level of 76.4% (1.3017).

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.

Overview of fundamentals:

There were no interesting economic reports or news in the UK and the US on Tuesday. Thus, the information background is currently absent, which does not prevent traders from continuing to buy the British currency.

News calendar for the US and UK:

US - consumer price index (12:30 GMT).

US - consumer price index excluding food and energy prices (12:30 GMT).

US - FOMC decision on the main interest rate (18:00 GMT).

US - accompanying FOMC statement (18:00 GMT).

US - economic forecast from the FOMC (18:00 GMT).

US - FOMC press conference (18:00 GMT).

On June 10, the UK calendar is empty again, and important information about changes in the Fed's monetary policy, as well as inflation for May, is expected from the US.

COT (Commitments of Traders) report:

Last Friday, a new COT report was released that showed a strong reduction in long-term contracts among the "Non-commercial" group. This means that major market players who earn money by changing the exchange rate, got rid of purchases of the British during the reporting week. And yet it is the pound who has shown growth recently. Thus, the mood of major speculators does not coincide with the general mood of traders for the pound/dollar pair. It could be assumed that the total number of long contracts is the case, which could have grown significantly due to the "Commercial" or "Non-reportable" groups, but the total number of long contracts decreased during the reporting week. Thus, there was a paradoxical situation: traders sold the pound, but it eventually rose. Perhaps traders sold off the US dollar in even greater volumes? This week, the situation does not change at all, the British pound continues to grow steadily.

Forecast for GBP/USD and recommendations to traders:

I do not recommend selling the pound in the current conditions, in any case, there are no new sales signals at the moment. I recommend continuing to hold purchases of the pair with the goals of 1.2803 and 1.3002 and the stop-loss level under the ascending corridor of the hourly 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.