GBP/USD – 1H.
According to the hourly chart, the quotes of the GBP/USD pair performed a new rebound from the downward trend line, which led to a reversal in favor of the US currency and a fall to the corrective level of 100.0% (1.3800). A little earlier, the pair's quotes performed a close over the downward trend corridor. However, the "bearish" mood of traders is still preserved due to the rebound from the trend line. Thus, if the pair does not return to the trend line in the near future, the US currency has a good chance of continuing growth. If the pair returns to the trend line today, it will probably close above it, which will allow traders to consider growth. The information background from the UK yesterday was as uninteresting as from Europe or the USA. The business activity index for the construction sector rose to 66.3 in June. However, this report still did not support the British. And no more economic data was received from Britain.
At the same time, there is a fairly large amount of news that is not related to the economy. Yesterday, Boris Johnson said that he expects that the lifting of all quarantine restrictions will take place on July 19, as planned. On this day, all restrictions on social distancing and wearing masks should be lifted. All restrictions on visiting places of mass assembly of people (for example, stadiums) will also be lifted. Let me remind you that it is in the UK that a new surge of coronavirus diseases has been observed recently. And this time we are talking about a fairly large number of diseases with the Indian strain. And a little earlier, Israeli scientists concluded that the Pfizer vaccine is not as effective in the fight against the Indian strain as against the usual coronavirus. Thus, in the UK, although more than 60% of the population has already received both doses of the vaccine, it would be better to think about extending the quarantine, rather than lifting it. Many British experts fear the fourth wave of the pandemic.
GBP/USD – 4H.
On the 4-hour chart, the GBP/USD pair performed a reversal in favor of the US currency and began the process of falling towards the level of 38.2% (1.3642) after the formation of a bearish divergence at the MACD indicator and the rebound from the corrective level of 23.6%. The hourly chart also retains a "bearish" mood. However, you should carefully monitor the behavior of the pair near the trend line, as its bull traders may try to attack again today.
Overview of fundamentals :
On Tuesday, the calendars of economic events in the UK and the US contained only one entry each. Both business activity indices had almost no effect on the mood of traders.
News calendar for the USA and the UK:
US - publication of the minutes of the Fed meeting (18:00 UTC).
On Wednesday, the calendar of economic events in the UK is empty. And in the US, the minutes of the last FOMC meeting will be released only late in the evening. Perhaps interesting information will arrive late in the evening.
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, this is only for formality because a total of 35 long contracts were closed and 454 short contracts were opened. 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.
Forecast for GBP/USD and recommendations to traders:
I recommend new purchases of the British with the goals of 1.3859 and 1.3906. I recommend closing purchases if there is a rebound from the trend line on the hourly chart. I do not recommend selling the pound sterling now, since there are few reasons for this and there are few signals
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.
