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GBP/USD – 1H.
According to the hourly chart, the quotes of the GBP/USD pair have been secured under the corrective level of 100.0% (1.3800), which allows us to count on a further fall in the direction of the next Fibo level of 127.2% (1.3679). However, the movements of yesterday suggest that traders now do not have a common consensus on which of the currencies to buy and which to sell. Although the information background was practically absent yesterday, and those events that still occurred during the day did not have any special effect on the mood of traders, the pair changed the direction of movement several times, and eventually ended the day in the same positions where it started. However, the downward trend line still characterizes the current mood of traders as "bearish". Last night, the Fed published the minutes of the last meeting. Let me remind you that during this meeting, Jerome Powell mentioned that in the near future the regulator may start discussing the possibility of completing the economic stimulus program. It was this phrase that worked better for traders. Yesterday, traders were openly waiting for confirmation of this phrase. Traders expected that the protocol would contain information about specific deadlines and conditions for curtailing the economic support program. But the document did not contain anything like that. It contained the same vague rhetoric that Powell himself voiced a couple of weeks ago. For example, the minutes contained the phrase that the Fed members expect that the conditions that allow them to start curtailing the QE program will come a little earlier than expected at previous meetings. The Fed members also agreed that it is good to be able to complete the stimulus program ahead of time if such a need and opportunity arises. In general, no specifics. Therefore, there is no reaction of traders.
GBP/USD – 4H.
The GBP/USD pair on the 4-hour chart, after the formation of a bearish divergence at the MACD indicator and the rebound from the corrective level of 23.6%, performed a reversal in favor of the US currency and began the process of falling towards the level of 38.2% (1.3642). The hourly chart also retains a "bearish" mood. However, you should carefully monitor the behavior of the pair near the trend line, as bull traders may try to attack again in the coming days.
Overview of fundamentals:
On Wednesday, the calendars of economic events in the UK and the US were almost empty. The only event of the day (the Fed's protocol) did not affect the mood of traders.
News calendar for the USA and the UK:
US - number of initial applications for unemployment benefits (12:30 UTC).
On Thursday, the calendar of economic events in the UK is again empty. And in the US, only an uninteresting report on applications for unemployment benefits will be released. Today, the information background will be minimal.
COT (Commitments of Traders) report:
The latest COT report from June 29 for the British showed that the mood of the major players continues to change in favor of the bears. During the reporting week, speculators practically did not increase or get rid of any contracts. Thus, the "bearish" mood among the "Non-commercial" category of traders increased. However, it is only for formality because a total of 35 long contracts were closed and 454 short contracts were opened. However, the total number of long contracts concentrated in the hands of speculators still exceeds the total number of short contracts by 13 thousand (two weeks ago the gap was 2 times). Thus, the British dollar has not yet lost all chances of resuming growth.
Forecast for GBP/USD and recommendations to traders:
I recommend new purchases of the British with the targets of 1.3906 and 1.3972 if the pair closes above the trend line on the hourly chart. I do not recommend selling the pound now, since there are few reasons for this and there are few signals.
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" - small traders who do not have a significant impact on the price.
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