02.07.202011:16 Forex Analysis & Reviews: Analysis and forecast for GBP/USD on July 2, 2020

Good day, dear traders!

At yesterday's trading, the pound/dollar currency pair significantly increased, thus continuing the upward trend that began on the first day of July trading. Today is an important day for the markets. In connection with tomorrow's celebration of US Independence Day, data on the US labor market for June will be published today, at 13:30 London time. You can view forecasts for these and other reports by looking at the economic calendar. And we move on to technical analysis of GBP/USD. Given the recent close of June, I would like to start the analysis with a monthly timeframe.

Monthly

Here, the first thing that catches the eye is the huge upper shadow of the June candle. As you can see, after reaching highs at 1.2811, the pair lost almost all of its growth and ended last month's trading at 1.2397. Bulls on the pound did not even manage to close June above the important technical level of 1.2400, which previously served as a support.

It is also worth paying attention to the fact that the trading of the first summer month ended under the Kijun and Tenkan lines of the Ichimoku indicator, which played a significant role in the formation of such a candle. As a rule, after such models of candle analysis, it is difficult to count on the predominance of bullish sentiment. No, of course, there will be rises during this month, but only the confident closing of the current month above 1.2811 will finally confirm the bullish mood for the pound. This is not an easy task. A breakdown of support at 1.2250 looks most likely. If this happens, the pair risks falling to 1.2070.

Daily

For the third day in a row, the pair is moving quite intensively in the north direction. At the time of writing, the pound/dollar pair is already trading above the most important psychological level of 1.2500, near 1.2520.

The quote broke through the resistance at 1.2463, went up through the exponential moving average and rested on the Kijun line of the Ichimoku indicator. If the growth continues, and this will happen in the case of weak data on the US labor market, the pair will rise to 1.2587. As you can see, there is a 200 exponential moving average, which can block the road to a further rise in the price and provoke a rebound down. If today's trading closes above 200 EMA, there will be prospects for growth into a strong technical resistance zone of 1.2645-1.2685.

The bearish scenario will become relevant if the bulls for the pound lose all the current growth today, and the trading ends at the level of 1.2463. Given the risk-taking mood of market participants and the weakness of the US dollar, it is most likely that the recovery will continue. If so, then the main trading recommendation for GBP/USD will be purchases that are better to open not at the peak of the market, but after corrective pullbacks.

Since the initial sharp movements in each direction are not excluded after the release of non-farms, I recommend looking for options for purchases after short-term declines in the area of 1.2470. If under the strong resistance level of 1.2540 there are reversal patterns of candle analysis on the four-hour and (or) hourly charts, this will be a signal to open short positions on the pair. Don't forget that today will be a hot day. I advise you to take your time and be careful.

Good luck!