FX.co ★ Forecast for GBP/USD on June 28 (COT report).

GBP/USD – 1H.

According to the hourly chart, the GBP/USD pair quotes on Friday continued falling, which began a few days before. Thus, at this time, the GBP/USD and EUR/USD pairs are not moving in the same way. However, the GBP/USD pair is now showing the process of falling, and the closing of quotes under the Fibo level of 76.4% (1.3906) increases the probability of continuing the fall in the direction of the levels of 1.3859 and 1.3800. On Friday, the information background for the British was relatively weak because these were the same reports from America, which did not impact the movement of the EUR/USD pair. However, at this time, it is necessary to pay attention to epidemiological data. In the UK, it seems that the third wave of coronavirus is beginning, which could jeopardize the recovery of the British economy.

Recently, the central banks of the world were optimistic about the recovery. There were even rumors in the United States and Britain that the economic support program could be completed ahead of schedule. However, the latest reports show that the number of cases of COVID has increased to almost 20 thousand per day. It was the maximum value since February of this year when the second wave of the epidemic was on the decline. Vaccination of the population is taking place at a high rate, and about 60% of citizens have already received both doses of the vaccine. Thus, I want to believe that there will be no new full-scale wave of the pandemic. After all, most of the UK population has already been vaccinated. However, this new outbreak of the epidemic may still leave a negative imprint on the economy. Let me remind you that the Bank of England, at its last meeting, did not make any statements about the possible completion of the QE program or raising rates. Therefore, it is quite difficult for the pound to find support now.

GBP/USD – 4H.

The GBP/USD pair on the 4-hour chart performed a fall to the corrective level of 23.6% (1.3870). The rebound of quotes from this level will allow traders to count on a reversal in favor of the British dollar and some growth in the direction of the level of 1.4003. Closing quotes below the level of 23.6% will allow us to expect a further fall in the direction of the next corrective level of 38.2% (1.3642).

GBP/USD – Daily.

The pair's quotes closed under an important trend line on the daily chart, which now allows traders to 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 performed a close over the second descending trend line on the weekly chart. Thus, the chances of long-term growth of the pound remain.

Overview of fundamentals:

On Friday, the information background was average in strength. However, traders still did not pay due attention to the American reports.

News calendar for the USA and the UK:

On Monday, the calendars of economic events in the UK and the US are empty, so there will be no information background today.

COT (Commitments of Traders) report:

The latest COT report from June 22 for the British showed that the mood of the major players has changed in favor of the bears. The number of long contracts closed by speculators amounted to 7,000. At the same time, about 10,000 short contracts were opened. Thus, the "bearish" mood among the "Non-commercial" category of traders has intensified, which allows us to count on a further fall in the British dollar. However, the total number of long contracts concentrated in the hands of speculators still exceeds the total number of short contracts by 14 thousand (two weeks ago, the gap was two times). Thus, the Briton has not yet lost all chances of growth.

GBP/USD forecast and recommendations for traders:

I recommend new purchases of the British when rebounding from the level of 1.3870 on the 4-hour chart with a target of 1.4003. Conversely, I recommend selling the pound sterling if the 4-hour chart closes at the level of 1.3870 with a target of 1.3800.

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.