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GBP/USD – 1H.
According to the hourly chart, the quotes of the GBP/USD pair on Thursday continued the process of falling inside the descending trend corridor and closed under the corrective level of 100.0% (1.3800). Thus, the fall of the pair's exchange rate can be continued in the direction of the next Fibo level of 127.2% (1.3679). The downward trend corridor still characterizes the current mood of traders as "bearish." It will change to bullish only after the quotes close above the corridor. During yesterday, a fairly large amount of news was also received from the UK. The most disappointing concerns the spread of the coronavirus and its new mutations across the UK. In recent days, there have been about 25,000 cases of the disease in the country, which is a lot, given that more than half of the population has already received both doses of the vaccine.
In addition, it became known this week that the GDP of Britain in the first quarter declined more than traders expected, and the governor of the Bank of England yesterday urged not to worry about the growth of inflation, explaining this process by "temporary factors." Everything would be fine, but a day earlier, a member of the monetary committee, Andy Haldane, said that inflation could rise to 4%. The Bank of England should already think about how to curb the growth of consumer prices. Thus, opinions in the Bank of England are divided, which does not add optimism to bull traders. Also, yesterday, the index of business activity in the UK manufacturing sector was released, which fell to 63.9 points in June. Paired with quite good data from the US this week, the entire information background supports the dollar. An important Nonfarm Payrolls report will be released today.
GBP/USD – 4H.
The GBP/USD pair on the 4-hour chart performed a consolidation under the corrective level of 23.6% (1.3870). Thus, the decline in the pair's quotes can be continued in the direction of the next corrective level of 38.2% (1.3642). A bullish divergence is brewing for the MACD indicator, the formation of which will allow us to expect a reversal in favor of the British and some growth.
GBP/USD – Daily.
The pair's quotes closed under an important trend line on the daily chart, which now allows traders to expect a further drop in quotes in the direction of the Fibo level of 100.0% (1.3513).
GBP/USD – Weekly.
The pound/dollar pair performed a close over the second descending trend line on the weekly chart. Thus, the chances of long-term growth of the pound remain.
Overview of fundamentals:
On Thursday, the calendars of economic events in the UK and the US contained many important events that had a specific impact on trading. In general, the information background was of average strength.
News calendar for the USA and the UK:
US - unemployment rate (12:30 UTC).
US - change in the number of people employed in the non-agricultural sector (12:30 UTC).
US - change in the average hourly wage (12:30 UTC).
On Friday, the calendar of economic events in the UK is empty, and significant reports will be released in the US. Thus, I expect a strong influence of the information background today.
COT (Commitments of Traders) report:
The latest COT report from June 22 for the British showed that the mood of the major players has changed in favor of the bears. The number of long contracts closed by speculators amounted to 7 thousand. At the same time, about 10 thousand short contracts were opened. Thus, the "bearish" mood among the "Non-commercial" category of traders has intensified, which allows us to count on a further fall in the British dollar. However, the total number of long contracts concentrated in the hands of speculators still exceeds the total number of short contracts by 14 thousand (two weeks ago, the gap was two times). Thus, the Briton has not yet lost all chances of growth.
Forecast for GBP/USD and recommendations to traders:
I recommend new purchases of the British when closing on the hourly chart above the descending corridor with targets of 1.3906 and 1.3972. I recommend selling the pound since it was closed on the hourly chart at the level of 1.3800 with the goal of 1.3679.
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.
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