GBP/USD – 1H.

According to the hourly chart, the GBP/USD pair continued the process of falling on Monday and closed under the corrective level of 127.2% (1.3679). Thus, the fall of quotes can be continued in the direction of the next level of 1.3600. The British dollar has already fallen by almost 200 points in the last few days. It is noteworthy that the British dollar resumed its fall exactly when traders realized that the UK authorities were not going to abandon their intentions to lift all quarantine restrictions on July 19. At least 40 thousand new cases of coronavirus have been recorded in the country over the past week. And now we are talking about an Indian strain of the disease, which is considered more contagious and more resistant to vaccines. In the last two days, the number of cases has been decreasing. However, this does not mean that the fourth wave is over.

In some EU countries, there is also an increase in cases of the disease. Thus, the authorities of some EU countries are tightening quarantine measures. Thus, the Briton has become a hostage to the actions of the British authorities, which representatives of the healthcare sector condemn. Against the background of these events, many traders have serious fears that the fourth wave of the pandemic may be even stronger than the third, and the British authorities will have to introduce a new "lockdown" sooner or later. Naturally, with this option, a new contraction of the economy is expected, which has only recently begun to recover from previous quarantines and "lockdowns." All these forces traders to get rid of the pound sterling out of harm's way. In the next few days, you should carefully monitor the dynamics of infections with the virus. If the number of cases decreases, this may remove additional pressure from the Briton. At least for a while.

GBP/USD – 4H.

The GBP/USD pair on the 4-hour chart performed a fall to the corrective level of 38.2% (1.3642). The rebound of quotes from this level will allow traders to count on a reversal in favor of the British currency and some growth in the direction of the Fibo level of 23.6% (1.3870). Closing the pair's rate at 1.3642 will increase the probability of continuing the fall in the direction of the next corrective level of 50.0% (1.3457). A lot will depend on how the fourth wave of the epidemic develops in the UK. There are no emerging divergences today.

Overview of fundamentals:

On Monday, the calendar of economic events in the UK was empty, and there was no important news in the US either. Thus, the information background remained empty.

News calendar for the United States and the United Kingdom:

On Tuesday, the calendars of economic events in the United Kingdom and the United States are again empty. Thus, the information background will still be absent today. Nevertheless, the news about the spread of the virus in Britain may continue to cause quite strong activity of traders on the sales of the British.

COT (Commitments of Traders) report:

The latest COT report on July 13 for the British showed that the mood of major players is again becoming more "bearish." During the reporting week, speculators increased 1,729 short contracts and got rid of 8,054 long contracts. Thus, the "bullish" mood of the "Non-commercial" category of traders has weakened again. Over the past four weeks, the mood of traders in both the euro and the pound has become more "bearish." However, the changes in the British are still less pronounced. However, it is for the British that the number of long and short contracts in the hands of speculators is already almost the same. Thus, it is already possible to talk about the lack of an advantage for bull traders.

Forecast for GBP/USD and recommendations to traders:

I recommend new purchases of the British with the targets of 1.3679 and 1.3741 if the pair performs a rebound from the level of 1.3642 on the 4-hour chart. I recommend selling the pound today if a close is made under the level of 1.3642 on the 4-hour chart with targets of 1.3600 and 1.3524.

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.