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GBP/USD – 1H.
According to the hourly chart, the quotes of the GBP/USD pair on Friday performed a reversal in favor of the British and a sharp increase to the corrective level of 76.4% (1.3906). The rebound from this level worked in favor of the US currency. The pair's quotes have already performed a fall to the level of 1.3859. Now, the rebound from it will allow traders to count on the growth of the pair again, and closing under it will increase the probability of a further fall. I would like to note that the information background of Friday did not influence the movement of the pound/dollar pair. Friday's economic reports from the UK all turned out to be weaker than traders' expectations. Thus, it would be much more logical to see a drop in the quotes of the British. But instead, traders witnessed a strong growth, which has already been replaced by a fall today. It's as if traders realized that they bought the British by mistake, and are already trying to get rid of it today.
Thus, I do not exclude that today the pound/dollar pair will fall to the corrective level of 100.0% (1.3800). Returning to the statistics from Britain, it should be said that the main indicator of the state of the country's economy turned out to be much weaker than traders' assumptions. According to the GDP indicator, it is possible to judge the pace at which the British economy is recovering. And these rates are not the highest. Thus, those hints from representatives of the monetary committee of the Bank of England about the possible completion of the program of assistance to the economy and an increase in the rate next year can be forgotten for now. Especially because the number of cases of "coronavirus" and its new strains continues to grow in the UK recently. Moreover, there are sick and dead people among those categories who have already received two vaccinations against the virus. All this makes it more cautious to make any forecasts for the economy since, in Britain, which is among the leading countries in terms of vaccination rates, there are already more than 30 thousand cases of new cases per day. The number of cases in Spain is also growing.
GBP/USD – 4H.
The GBP/USD pair on the 4-hour chart performed a close above the corrective level of 23.6% (1.3870). However, over the past few hours, a reversal was made in favor of the US dollar and closed below this level. Thus, on the 4-hour chart, the fall of quotes can be continued in the direction of the Fibo level of 38.2% (1.3642). Also, a lot will depend on the level of 1.3859 on the hourly chart. The nearest target is the level of 1.3800. There are no brewing divergences today.
Overview of fundamentals:
On Friday, there were quite a lot of interesting entries in the calendar of economic events in the UK. In addition to economic statistics, there was also a speech by the Governor of the Bank of England, Andrew Bailey.
News calendar for the United States and the United Kingdom:
On Monday, the calendars of economic events in the United Kingdom and the United States are empty. Thus, there will be no information background today. It is a good opportunity for the British to return to the initial positions under the level of 1.3800.
COT (Commitments of Traders) report:
The latest COT report on July 7 for the British showed that the mood of the major players has changed again in favor of the bulls. During the reporting week, speculators increased 4,732 long contracts and 1,870 short contracts. Thus, the "bullish" mood of the "Non-commercial" category of traders has slightly increased. But in general, the situation continues to be very similar to the situation for the euro. The "bullish" mood of the major players also remains, and the advantage of open long contracts is about 1.5 times. Thus, the British dollar retains the 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 performs a rebound from the level of 1.3859 on the hourly chart. I recommend selling the pound today if a close is made under the level of 1.3859 with targets of 1.3800 and 1.3741.
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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