GBP/USD 1H
The pound/dollar continues to trade with an increase on June 11. Last night there were certain hopes that the pair would start a small correction, but buyers do not even want to take part of the profit so that the pair moves slightly away from their highs. Thus, firstly, quotes of the pair overcame an important resistance area of 1.2719-1.2759, and secondly, they almost reached the resistance level of 1.2821. There are still no signs of the beginning of a correction, although a rebound may follow from the level of 1.2821. Although the GBP/USD pair has left the upward channel, however, the upward trend persists, as does the relevance of the upward trend line. All indicators and indicator lines are steadily increasing.
GBP/USD 15M
Both linear regression channels are still directed up on the 15-minute timeframe. Since the resistance area of 1.2719-1.2759 was overcome, we believe that now the pair has new opportunities for growth, you only need to overcome the target of 1.2821.
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 and continues to do so (the COT report affects the days only until Tuesday inclusive, comes out with a three-day delay). Thus, the trend remained the same in the last three trading days of the past week. The total number of contracts opened during the reporting week is also in favor of Short (+9020; +4591). Thus, as we said over the past week, the growth 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 expecting a new downward trend for both major pairs, but technical analysis continues to confidently signal an upward trend and the absence of a correction.
The fundamental background for the British pound has not changed recently, and it is simply absent during the current week. Even statistics and fundamental data from across the ocean do not have much effect on the movement of the pound/dollar pair. Traders just keep selling the US dollar and that's it. Of course, reasons can always be found, given the political crisis that has ripened in the United States, the prevailing rates of the spread of coronavirus in the United States, given the Federal Reserve's forecasts of an economic decline of 6.4% in 2020 in the United States. The UK macroeconomic calendar is empty again on Thursday, June 11, and the United States will only publish a report that is not as important as it used to be, which is for applications for unemployment benefits. All the most interesting events are scheduled for Friday. Industrial production and GDP in the UK will be published on this day. Therefore, the pound may continue to rise in price along with the dollar at least until Friday, and it is still advised to track the possible beginning of the correction using technical indicators. For obvious reasons, trading lower is not recommended. In general, we do not recommend trading off-trend.
There are two main scenarios as of June 11:
1) The initiative for the pound/dollar pair remains in the hands of buyers, so long positions remain relevant with targets at resistance levels of 1.2821 and 1.2979, the first of which can be considered fulfilled. However, it is now recommended to wait until we overcome the level of 1.2821 to open new longs. Take Profit in this case will be about 140 points.
2) Sellers at the moment continue to remain in the shadows and do not show themselves. If buyers release the pair below the Kijun-sen line (1.2661), then it will be possible to carefully open short positions with the goal of Senkou Span B line (1.2468). However, sell-positions should not be large in volume, since the upward trend line keeps in action exactly the upward trend. In this case, Take Profit will be about 170 points.
