GBP/USD 1H

The pound/dollar also traded with an increase last week, and could not even start a downward correction at the end of the week. The bulls were only allowed to pull down quotes from the highs of June 5 by 60 points. At the same time, the ascending channel acquired a more convincing appearance and a less strong angle of inclination. Thus, now quotes of the pair will be traded inside the channel with a greater degree of probability, and exit from it will mean the end of the upward trend. So far, the entire GBP/USD initiative remains in the hands of buyers. During the past week, all resistance levels were overcome, and at the same time, the highs from April 14 and 30 were 1.2642 and 1.2647. Thus, the bulls did not meet any serious resistance in their path. There is also an upward trend in the pair, which also indicates growth.

GBP/USD 15M

There is not a single sign of a trend change on the 15-minute timeframe, not even the start of a correction. Both channels of linear regression are directed upward, so the trend in the short term is unambiguously upward.

COT Report

The COT report for the British pound shows the exact opposite (from the euro) picture of what is happening. Professional players during the reporting week intensively reduced purchase contracts (-12,784 contracts), as well as increased sales contracts (+2,215). Nevertheless, the British currency has risen in price anyway and continues to rise in price (the COT report affects the days only until Tuesday inclusive, comes out with a three-day delay). Thus, in the last three trading days of the past week, the trend remained the same. The total number of open contracts for the reporting week is also in favor of Short (+9020; +4591). Thus, as we mentioned over the past week, the strengthening of European currencies raises a large number of questions. The latest COT report shows that the issues were not unfounded, and the growth of the euro and the pound is almost groundless. Based on this, we are even more waiting for a new downward trend for both major pairs.

The fundamental background for the British pound has not changed recently. At the end of last week, macroeconomic statistics from across the ocean could provide little support for the US currency. In the article on the euro/dollar, we assumed that it did, but, as we can see, the pound/dollar did not react to any of these reports. Therefore, most likely, buyers of the euro recorded a profit, but buyers of the pound did not. Thus, macroeconomic statistics remains openly in the background for market participants. No interesting news is expected from the UK in the first days of the new trading week, while we are still waiting for news on the most interesting topics from the US. It's even difficult to imagine which particular fundamental topic can turn the pair down, given the fact that it is now growing without any particular reason. It is unlikely that rallies and protests in the United States, which have no effect on the economy, will have such an impact on investors of the US currency. Thus, we recommend that at such an incomprehensible time, carefully monitor the technical data, as it is they that most accurately now reflect what is happening on the market.

There are two main scenarios as of June 8:

1) The initiative for the pound/dollar pair remains in the hands of buyers, so long positions remain relevant with targets near the level of 1.2800. Take Profit in this case will be about 140 points. As long as the pair remains within the rising channel, the bulls continue to take the initiative.

2) Sellers continue to remain in the shade and will be ready to return to the market if buyers release the pair below the rising channel. Short positions can be opened below the critical line (1.2560) with the target at the level of 1.2434, near which also lies the strong Senkou Span B line and the support area of 1.2403 - 1.2422. In this case, Take Profit will be about 120 points.