FX.co ★ Forecast for GBP/USD on July 5 (COT report).

GBP/USD – 1H.

According to the hourly chart, the quotes of the GBP/USD pair on Friday performed a reversal in favor of the British and a(noticeable increase. At the end of the day, the pair secured above the corrective level of 100.0% (1.3800), as well as above the descending trend corridor. Thus, we can assume that the mood of traders has now changed to "bullish" on the hourly chart. The growth process can now be continued in the direction of the levels of 1.3859 and 1.3906. The information background on Friday for the British did not differ from the background for the Europeans. All the news of the day came from the United States. Thus, they had the same impact on the euro and the pound. And the euro and the pound themselves reacted to the economic data from America in almost the same way. Let me remind you that the Nonfarm Payrolls report, which turned out to be stronger than forecasts and expectations, did not cause the reaction that I expected.

Today will be a semi-holiday in the United States since Independence Day was celebrated yesterday. Most likely, the activity of traders today will be minimal. However, the prospects of the British dollar, which completed the closure over the trend corridor, are now more important. Let me also remind you that in the UK, there has been an increase in cases of coronavirus in the last few weeks. The latest statistics show that there are at least 20 thousand new cases every day. In addition, the number of diseases is also beginning to grow in several EU countries, and many are now talking about a new strain of "lambda", which is presumably more contagious. In general, it may be quite difficult for the British to show growth in the near future. Reports on Friday were supposed to cause a rise in the dollar. On the contrary, traders showed their interest in buying the British.

GBP/USD – 4H.

The GBP/USD pair on the 4-hour chart consolidated under the corrective level of 23.6% (1.3870). However, the formation of a bullish divergence in the MACD indicator allowed us to perform a reversal in favor of the British currency and start the growth process in the direction of the corrective level of 23.6% (1.3870). Closing the pair's exchange rate above the Fibo level of 23.6% will increase the probability of continuing growth towards the next level of 1.4003.

GBP/USD – Daily.

On the daily chart, the pair's quotes closed under an important trend line, 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.

On the weekly chart, the pound/dollar pair closed over the second downward trend line. Thus, the chances of long-term growth of the pound remain.

Overview of fundamentals:

On Friday, the calendar of economic events in the UK was empty. However, American statistics were quite enough for the day to be active. However, for some reason, bear traders did not find any grounds for new sales of the pair, although the information background turned out to be in favor of the dollar.

News calendar for the United States and the United Kingdom:

On Monday, the calendars of economic events in the United Kingdom and the United States are empty. Thus, I expect that there will be no influence on the information background today. The day can be as boring as possible.

COT (Commitments of Traders) report:

The latest COT report from June 29 for the British showed that the mood of the major players continues to change in favor of the bears. During the reporting week, speculators practically did not increase or get rid of any contracts. Thus, the "bearish" mood among the "Non-commercial" category of traders increased. However, the total number of long contracts concentrated in the hands of speculators still exceeds the total number of short contracts by 13 thousand (two weeks ago the gap was 2 times). Thus, the British dollar has not yet lost all chances of resuming growth.

GBP/USD forecast and recommendations for traders:

Purchases of the British dollar were recommended when closing on the hourly chart above the downward corridor with targets of 1.3859 and 1.3906. Now, these positions should be kept open. I do not recommend selling the pound now, since there are few reasons for this and there are few signals right now.

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.