GBP/USD 1H
The pound/dollar continues to trade in close proximity to local highs at the beginning of a new trading week, while maintaining high chances of forming an upward trend, despite the lack of fundamental and macroeconomic support. Traders rested in a fairly strong resistance area of 1.2719-1.2759 at the moment, in which the extremes were previously located. As we can see, we have not managed to overcome this area easily either. Therefore, similar to the euro's case, small chances for a correction or completing the upward trend are still preserved. And until the bulls manage to overcome this area, the main option is to consider the option with falling quotes. Well, consolidating under the critical line will make forming a new downward trend more likely.
GBP/USD 15M
Both linear regression channels are still directed up on the 15-minute timeframe, but not as much as before. Thus, certain chances for a new round of correction are present. But everything will depend on the behavior of the bulls in the area of 1.2719-1.2759.
COT Report
The COT report for the British pound shows the exact opposite picture (from the euro) of what is happening. Professional players intensively reduced purchase contracts (-12,784 contracts) during the reporting week, as well as increased sales contracts (+2,215). Nevertheless, the British currency has risen in price and continues to grow (the COT report affects the days only until Tuesday inclusive, comes out with a three-day delay). Therefore, the trend remained the same in the last three trading days of the past week. The total number of open contracts for the reporting week is also in favor of Shorts (+9020; +4591). 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 waiting for a new downward trend for both major pairs.
The fundamental background for the British pound has not changed recently, and is simply absent at the beginning of the new week. Data from the US could provide little support for the greenback at the end of last week, but it did not. A lot will depend on today's results of the Fed meeting, which, incidentally, can easily be ignored by traders. The UK does not provide interesting information today. Neither macroeconomic nor fundamental. Traders continue to expect a denouement in the negotiations between Brussels and London, but so far it hasn't been either, as David Frost and Michel Barnier cannot make progress in the negotiations, and Boris Johnson will only go to Brussels in the second half of June. Thus, traders will only receive a sufficiently voluminous and important package of macroeconomic statistics from the UK on Friday. Until then, technical factors will remain the most significant. In general, we believe that the pound has already broken all conceivable and unimaginable records in the current environment. Whatever the situation in the United States, things are no better in Britain.
There are two main scenarios as of June 10:
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. However, in order to open new longs, you are advised to wait until the important area of 1.2719-1.2759 has been overcome. Take Profit in this case will be from 60 to 210 points. Before overcoming the indicated area, bears retain high chances for the start of a new downtrend.
2) Sellers at the moment continue to remain in the shadows, but will be ready to return to the market if buyers release the pair below the Kijun-sen line and fail to overcome 1.2719-1.2759. Short positions can be opened below the critical line (1.2677) with the target of the support level of 1.2416, 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 190 points.
