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GBP/USD – 1H.
Hello, traders! On the hourly chart, the quotes of the GBP/USD pair continued to fall on Friday, as the US dollar was supported by American statistics, which I have already mentioned in the article on the euro. The upward pullback started tonight, and the fate of the pound/dollar pair should be decided in the first two days of the new week. On the one hand, a drop in quotes has been brewing for a long time. On the other hand, the constant ongoing events in America, which almost always are not even "black" color, but some strange color, make bear traders cautious. I have already said that the coronavirus in America is extremely important for the prospects of the dollar. In recent weeks, the situation has started to improve, the number of daily recorded cases of the disease has moved from the area of 60-80 thousand to the area of 40-60 thousand. However, the Democrats and Republicans could not agree on a new package of assistance to Americans and the economy. Let me remind you that the new aid package has been discussed for a long time, however, the key differences are in its size. Trump offers no more than $ 1 trillion, the Democrats want three times as much. As a result, Donald Trump, bypassing the approval of Congress, simply signed several executive orders that involve payments of $ 400 in excess of unemployment benefits, tax breaks, and more. By and large, the American President again exceeded his authority, since he does not have the right to make such decisions without the approval of Congress.
GBP/USD – 4H.
On the 4-hour chart, the GBP/USD pair performed a new reversal in favor of the US currency near the corrective level of 161.8% (1.3157) and began the process of falling towards the corrective level of 127.2% (1.2964). However, on the approach to this level, the bullish divergence of the CCI indicator stopped the process of falling. Now the pair can start the process of returning to the corrective level of 161.8%. Fixing the pair's exchange rate under the low divergence and/or under the level of 127.2% will work in favor of continuing the fall in quotes.
GBP/USD – Daily.
On the daily chart, the pair's quotes performed an increase to the corrective level of 100.0% (1.3199), however, the level of 161.8% on the 4-hour chart did not allow the growth process to continue. Closing the pair's rate above the 100.0% level will work in favor of further growth in the direction of the Fibo level of 127.2% (1.3684).
GBP/USD – Weekly.
On the weekly chart, the pound/dollar pair performed an increase to the lower downward trend line. A pullback from this line may allow the pair to perform a reversal in favor of the US dollar and resume the process of falling towards the approximately 1.1500 level. This is a long-term perspective.
Overview of fundamentals:
There was no economic news in the UK on Friday. Three important reports came from America at once, which supported the dollar.
News calendar for the US and UK:
On August 10, British traders will have nothing to pay attention to, since the news calendars are empty in both the US and the UK.
COT (Commitments of Traders) report:
The latest COT report on the pound was again quite unexpected. Let me remind you that in the last two weeks, speculators either got rid of long contracts or opened more short contracts. That is, according to the logic of things, the Briton should have started falling two weeks ago. However, instead, the growth of its quotes continued. A new COT report showed that a group of "Non-commercial" traders has started to re-open long contracts. However, the previous two weeks can't be crossed out just like that. Despite the fact that speculators have again begun to favor the British, I still doubt his prospects. On the other hand, if the information background from America does not improve, the fall of the dollar may well resume.
Forecast for GBP/USD and recommendations to traders:
I recommend selling the pound with the goals of 1.2964 and 1.2812, if the close is made under the low divergence on the 4-hour chart. I recommend buying the British currency again if the quotes close above the level of 1.3157 with the goals of 1.3200 – 1.3250.
Terms:
"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.
"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy currency, not for speculative profit, but to ensure current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.
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