07.07.202111:14 Forex Analysis & Reviews: GBP/USD analysis and forecast for July 7, 2021

At yesterday's trading, the pound/dollar currency pair was trading quite volatile. The British pound is one of the most volatile currencies. Then there is the upcoming publication of the minutes of the Open Market Committee (FOMC) of the US Federal Reserve. Let me remind you that a certain part of market participants is still waiting for signals from the Federal Reserve about the timing of tightening monetary policy. Tonight, these expectations will either be met or refuted. For some reason, the latter option seems to be the most likely. Let me remind you that the Federal Reserve has its own "hawks" and "doves". The former believe that it will be necessary to tighten monetary policy from the middle of next year. The latter agree that it is necessary to tighten its policy no earlier than 2023. At the same time, both sides believe that much will depend on macroeconomic indicators, as well as the situation with the spread of the COVID-19 pandemic, which periodically has new strains (speaking of the delta strain). The situation in the UK is not quite clear. The delta strain causes an increase in the number of infected people. However, the government of Boris Johnson does not plan to stop lifting several restrictions for the return of Britons to normal living conditions.

Daily

At yesterday's trading, the pair soared to an important and strong level of 1.3900. However, after meeting strong resistance at 1.3896, it turned south and fell to 1.3771, from where it rebounded and ended trading on July 6 at 1.3793. I believe that the completion of yesterday's trading below the important and strong level of 1.3800 is a wake-up call for players to increase the exchange rate. On the other hand, for one candle closed below 1.3800, it may be premature to consider this level as truly broken. A lot will depend on the completion of today's trading, especially since the most suitable driver for the movement and mood of market participants is the publication of the minutes of the last FOMC meeting. Given this important event for the market, today's trading may end with strengthening and weakening of the GBP/USD quotes, and a Doji candle with equidistant shadows. Let's see what investors will see in the published protocols and how they will react to them in general.

Turning to trade recommendations, you can count on both profitable sales and successful purchases. I will share my personal opinion, which boils down to the fact that while the GBP/USD pair is trading below the most important price zone of 1.4000-1.4015, downward risks remain to the greatest extent. Moreover, the bulls for the pound have not yet managed to raise the rate even above the mark of 1.3900. However, I would venture to assume that a lot can be clarified today regarding the attitude of market participants to the US dollar, which will be based on the protocols published in the evening.

I consider the price zone for opening purchases to be 1.3810-1.3780. I recommend looking for sales after rises in the areas of 1.3900-1.3950 and 1.3960-1.4000. We are waiting for the publication of the protocols and the reaction of market participants to them. Tomorrow, we will summarize the results and try to determine the next direction of the GBP/USD currency pair.