GBP/USD – 1H.
According to the hourly chart, the GBP/USD pair performed a reversal in favor of the US currency on Monday and consolidated under the corrective level of 100.0% (1.3800). Thus, the fall of quotes can be continued in the direction of the next level of 1.3741. The rebound of quotes from this level will allow traders to expect a reversal in favor of the British dollar and a resumption of growth in the direction of 1.3800 and 1.3859. The pound/dollar pair is now a vivid example of how the pair should move, even if there are no important economic reports and events. Looking at the chart, you can immediately see that the pair is not standing in one place, and traders are actively trading it. The downward slope of the movement remains, although it is quite ambiguous. Nevertheless, the British managed to recover after the fall the week before last, so now it is hardly possible to say that the fourth wave of the disease in the UK plays an important role for traders.
On the other hand, the 4-hour chart clearly shows that the pair's quotes continue to fall. But, from my point of view, the current graphical picture is more suitable for the definition of "no trend." There are movements, but the Briton is moving down with great difficulty. Thus, at this time, an information background is also very necessary, which can help traders understand the long-term prospects of the pound/dollar pair. The next important event is the FOMC meeting, the results of which will be announced tomorrow evening. The next day, the US GDP report for the second quarter will be released, which promises to be very strong. Traders expect at least + 8.5%. Thus, these two events can help traders decide. In the UK, there will be nothing interesting this week. From time to time, we receive news about the progress of negotiations on the Northern Ireland Protocol, but there is no progress in these negotiations.
GBP/USD – 4H.
The GBP/USD pair performed a reversal in favor of the British currency on the 4-hour chart and continued the growth process in the direction of the corrective level of 23.6% (1.3870). The rebound of quotes from this level will work in favor of the US currency and the beginning of a fall in the direction of the Fibo level of 38.2% (1.3642). Closing the pair's exchange rate above 1.3870 will increase the probability of continued growth of the British dollar in the direction of the level of 1.4003.
Overview of fundamentals:
On Monday, the calendar of economic events in the UK did not contain a single entry, just like the US calendar. Thus, the information background continues to be absent for the pound/dollar pair.
News calendar for the USA and the UK:
US - change in the volume of orders for long-term goods (12:30 UTC).
US - indicator of consumer confidence (14:00 UTC).
On Tuesday, the calendar of economic events in the UK is empty again. In the US, two reports will be released, but they are not important for traders at this time. Thus, today the information background will be very weak.
COT (Commitments of Traders) report:
The latest COT report on July 20 for the British showed that the mood of major players continues to become more and more "bearish." In the reporting week, speculators increased 11,642 short contracts and got rid of 1,157 long contracts. The total number of contracts among all categories of traders is already almost the same – 182 thousand each. The number of short contracts in the "Non-commercial" category of traders is already higher than long. Thus, judging by the COT reports, there is a global trend change for the British dollar. However, the British dollar itself is not too eager to go down, but at the same time, it retains the chances of falling to the corrective level of 1.3513 (100.0% on the daily chart).
GBP/USD forecast and recommendations for traders:
Today, it is recommended to buy the British dollar if a close is made above the level of 1.3800 with a target of 1.3859 on the hourly chart. It is recommended to sell the pound since it closed under the level of 1.3800 on the hourly chart with a target of 1.3741.
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.
