GBP/USD – 1H.
According to the hourly chart, the GBP/USD pair quotes on Thursday performed a reversal in favor of the US currency and fell to the corrective level of 76.4% (1.3906). The rebound of quotes from this level has already worked in favor of the British and the beginning of new growth in the direction of the Fibo level of 61.8% (1.3972). However, the fall in quotes was caused yesterday by such an important event as the meeting of the Bank of England. Let me remind you that some traders expected specific changes in monetary policy or at least in the rhetoric of representatives of the British regulator. Some expected that there would be new hints of an increase in the key rate in 2022, some – that the number of votes for reducing the incentive program would increase. But almost all traders expected any changes.
However, the Bank of England disappointed everyone, leaving all the parameters of monetary policy unchanged. The balance of power in the vote on changing the QE program has also not changed. Only one member of the monetary committee voted for its reduction. The remaining eight voted against making changes. It is also impossible to highlight anything in the accompanying statement of the regulator since there are no changes in the rhetoric. The Bank of England only admits now that inflation may rise to 3%, although it previously announced the figure of 2.5%. However, at the same time, they still adhere to the point of view that the acceleration of inflation is temporary and it may begin to slow down in a few months. In general, traders did not receive any hints of tightening monetary policy, and they sold a few pounds sterling.
GBP/USD – 4H.
The GBP/USD pair performed a reversal near the level of 1.4003 on the 4-hour chart. However, there was no rebound from it. Thus, at this time, the quotes continue to fall in the direction of the Fibo level of 23.6% (1.3870). The rebound of the pair's rate from this level will allow traders to count on a reversal in favor of the British and a return to the level of 1.4003. Closing quotes below will increase the chances of continuing the fall in the direction of the corrective level of 38.2% (1.3642).
GBP/USD – Daily.
On the daily chart, the pair's quotes closed under an important trend line, which also now allows traders to expect a further drop in quotes in the direction of the Fibo level of 100.0% (1.3513). All charts currently predict a different direction of movement of the British pound.
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 information background was quite strong, but if the traders played back the Bank of England meeting results, they missed the American statistics. As a result, the pair's movement yesterday was not so strong.
News calendar for the USA and the UK:
US - main index of personal consumption expenditures (12:30 UTC).
US - change in the level of household spending (12:30 UTC).
US - change in the level of income of the population (12:30 UTC).
US - consumer sentiment index from the University of Michigan (14:00 UTC).
On Friday, all the reports of the day will come from the United States. However, there is a very low probability that traders will win them back. The information background can have a very weak impact on traders today.
COT (Commitments of Traders) report:
The latest COT report from June 15 on the British showed that the mood of the major players has changed in favor of the bulls. The number of short contracts closed by speculators exceeded the number of closed long contracts by 3,000. Nevertheless, in general, I note a drop in interest in contracts for the British and an increase in the "bullish" mood. However, this data can already be considered outdated since the most interesting events for the pound/dollar pair occurred already in those days that the latest report does not cover. Therefore, we need to wait for the next report to understand how the "Non-commercial" category of traders behaved during the collapse of the pound sterling at the end of last week.
GBP/USD forecast and recommendations for traders:
Purchases of the British dollar were recommended in the event of a rebound of quotes from the level of 100.0% (1.3800 with targets of 1.3906 and 1.3972. Both goals have been achieved. I recommend new purchases when rebounding from the level of 1.3906 with a target of 1.3972. I recommend selling the pound if the hourly chart closes at the level of 1.39062 with a target of 1.3859.
"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.