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31.07.202004:39 Forex Analysis & Reviews: Hot forecast and trading signals for the GBP/USD pair on July 31. COT report. Traders do not see the problems of the UK economy, but they see the coronavirus in the US

GBP/USD 1H

Exchange Rates 31.07.2020 analysis

The GBP/USD pair also continues its upward movement, even stronger and more confident than the EUR/USD pair. Buyers managed to overcome the second resistance level of 1.2988 this week, so now the road is open to the next target of 1.3174. The upward trend line is still relevant and supports bull traders. There are no other traders on the market now. As in the case of the euro, the pair cannot even get close to the critical Kijun-sen line, below which a trend reversal could be expected. Thus, sellers continue to stay out of the market and wait for the bulls to give them a chance.

GBP/USD 15M

Exchange Rates 31.07.2020 analysis

Both linear regression channels are still directed upwards on the 15-minute timeframe, so there are no prerequisites for changing the trend direction at the moment. The latest Commitments of traders (COT) report on the British currency alerted market participants. The pound sterling again grew against the US dollar during the reporting period (July 15-21), however, the "non-commercial" category, the most important, opened more Sell-contracts than Buy at this time. In just a week, non-commercial traders opened 4,500 new Sell-contracts and 3,000 Buy-contracts. Thus, the net position has decreased by about 1,500, which means that the bearish mood has strengthened among professional traders. The commercial category of traders also did not open Buy-contracts, but got rid of them, closing almost 5,000. Thus, both groups of traders did NOT increase their longs, nevertheless, the pound grew in price and continues to rise to this day. We still believe that such behavior of large players is evidence of an emerging trend change, but at the same time we admit that it could be an accident. Today's new COT report will show you how things are. If the net position for non-commercial traders decreases again (which would mean an increase in bearish sentiment), it will be quite strange.

The fundamental background for the GBP/USD pair also remains the same. No important communications have been received from the UK in recent days. Therefore, the latest information that could interest traders was about yet another failure of the Brexit negotiations and several reports that the deal was not achievable in principle. Michel Barnier still gave hope to the market and said that an agreement is still possible, but so far it looks like fantasy. Thus, the fundamental background, which continues to push the pair upward, is now coming exclusively from overseas. If the Federal Reserve meeting and its results were completely ignored by traders, then yesterday's GDP report only added fuel to the fire and increased the desire of market participants to buy the pound sterling. Thus, the general conclusion remains the same: we believe that the pound sterling is growing unfairly in some way, as the situation in Britain is now not much better than in the United States, if we consider the economic side of the issue. Nevertheless, the coronavirus and riots, along with the political crisis, are still outweighed. Accordingly, the pound may continue to grow further, but a downward reversal may be abrupt and unexpected, as traders could remember all the problems Britain has already faced and will surely face in 2020 and 2021.

There are two main options for the development of events as of July 31:

1) Buyers are still the dominant traders in the pound/dollar market. The second target for this week was overcome yesterday - the resistance level of 1.2988. Thus, it is now recommended to keep long positions open with the target of the resistance level of 1.3174. In this case, the potential Take Profit will be about 90 points.

2) Sellers are advised to start considering the possibility of opening short positions with the target of the Senkou Span B line (1.2707), but for this they need to wait until the Kijun-sen line (1.2916) and, accordingly, the upward trend line have been overcome. Sellers will have a good chance of forming a downward trend below these two barriers. In this case, the potential Take Profit is about 170 points.

*تعینات کیا مراد ہے مارکیٹ کے تجزیات یہاں ارسال کیے جاتے ہیں جس کا مقصد آپ کی بیداری بڑھانا ہے، لیکن تجارت کرنے کے لئے ہدایات دینا نہیں.

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