FX.co ★ Forecast for GBP/USD on July 27. The pound has nothing left but to wait for the outcome of the Fed meeting

According to the hourly chart, the GBP/USD pair continues the growth process inside the ascending trend corridor on Wednesday after rebounding from its lower line. Thus, the "bullish" mood of traders is still preserved, which is the fundamental difference with the EUR/USD pair, according to which a descending corridor is formed. As you can see, 7-8 hours before the results of the Fed meeting become known, the euro is inclined to fall, and the pound is inclined to rise. From my point of view, these differences will end soon since the results of the FOMC meeting should equally affect both pairs. You need a pound to perform a closure under its corridor or a euro over it. In any case, today, I expect strong movements throughout the day, and both pairs may change direction several times. In the UK, no significant events occurred during the week's first three days. There was not a single report. I would have been happy to review the latest news, but they were not even in the USA. Thus, the information background did not affect the mood of traders, and they traded exclusively on graphical analysis.

I cannot assume what will happen in the evening and tomorrow – today's Fed meeting is too important, Jerome Powell can give too significant comments, and we can observe too strong movements after these events. There is no news about the British elections now either. It is only known that a new TV debate between Rishi Sunak and Elizabeth Truss took place yesterday, but they were not brought to an end, as the presenter lost consciousness, so the show had to be interrupted. According to several experts, Elizabeth Truss won the first debate and now has a great chance of a final victory. But the British economy is unlikely to grow precisely because of the high probability of the Foreign Minister's victory. More important for him are the Fed meeting, its results, and the Bank of England meeting, which will be held next week.

On the 4-hour chart, the pair reversed in favor of the US currency after forming a "bearish" divergence at the MACD indicator, but the rebound from the level of 1.1980 did not allow it to fall below. Thus, the growth process has resumed in the direction of the downward trend line, which still keeps the current mood of traders "bearish." Fixing the pair's exchange rate above this line will significantly increase the probability of further growth of the British dollar in the direction of the Fibo level of 127.2% (1.2250).

Commitments of Traders (COT) Report:

The mood of the "non-commercial" category of traders has become a little less "bearish" over the past week. The number of long-contracts in the hands of speculators decreased by 1907 units, and the number of short – by 3746. Thus, the general mood of the major players remained the same – "bearish," and the number of short contracts still exceeded the number of long contracts by several times. Major players continue to get rid of the pound for the most part, and their mood has not changed much lately. So I think the British pound could resume its decline over the next few weeks. The British economy has certain chances for growth, but we are interested in a new trend, not a two or three-day growth, after which everything will return to normal.

News calendar for the USA and the UK:

US - basic orders for durable goods (12:30 UTC).

US - Fed interest rate decision (18:00 UTC).

US - FOMC press conference (18:30 UTC).

On Wednesday, the calendar of economic events in the UK is empty again. There are few important events in the USA today, but they can greatly affect the mood of traders. I expect strong movements and high activity today.

GBP/USD forecast and recommendations to traders:

I recommend new sales of the British when anchoring under the ascending corridor on the hourly chart with targets of 1.1933 and 1.1684. I recommended buying the British when rebounding from the 1.1933 level on the hourly chart with a target of 1.2146. Now, these deals can be kept open.