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23.07.202004:54 Forex Analysis & Reviews: Hot forecast and trading signals for the GBP/USD pair on July 23. COT report. London's optimism lies outside of this three-dimensional universe. Pound grows solely due to US events

GBP/USD 1H

Exchange Rates 23.07.2020 analysis

The GBP/USD pair corrected to the 1.2636-1.2660 area on Wednesday and once again rebounded from it, but this time from above. Thus, the upward movement resumed, and the initiative remained in the hands of buyers. As a result, the pair returned to the resistance level of 1.2755 by the end of the trading day. A new price rebound from this target can provoke a new round of corrective movement. In addition, an upward trend line has formed, which supports bull traders. And at the same time it will allow you to determine when the bears will come into play (consolidating the price below the trend line). So far, we are considering the option of maintaining the upward trend.

GBP/USD 15M

Exchange Rates 23.07.2020 analysis

The lower linear regression channel turned down on the 15-minute timeframe, signaling a possible trend reversal. However, there is still no confirmation on this chart, or on the higher one. The latest Commitment of traders (COT) report showed that professional traders (non-commercial category) continued to open Buy-positions, but not as zealously as before. In total, only 2,800 contracts were opened. However, the opposing category of commercial traders (those who enter the foreign exchange market in order to purchase currency for their commercial activities) closed both Buy and Sell contracts during the same reporting week. The British currency continued to rise in price during the July 15 to 21 period. This means that the new COT report may show that the bullish sentiment is strengthening among traders. The pound sterling began to rise in price even more after July 21, so we expect to see an increase in the net position in the next reports. If this does not happen, then we will assume that large traders are preparing for the trend to change into a downward trend.

The fundamental background for the GBP/USD pair remains positive at this time. Positive for the British pound. Only thanks to events and crises in the United States. And only until traders remember that the situation in the UK is no better (economically). The well-known British edition The Daily Telegraph published an article yesterday expressing fears that an agreement between London and Brussels would never be reached. And this threatens the British pound and the entire economy with a new fall. It is easy to guess that from January 1, 2021, almost all British businesses that have at least some business ties with European businesses will work with complications. This applies not only to trade, in which duties will rise, various quotas and World Trade Organization norms will begin to operate. This applies to both supply chains and vital categories of goods that may be in short supply in Britain. You should also keep in mind that more than 50% of British exports went specifically to Europe. According to the latest information, London wants to conclude a trade deal with Washington. US Secretary of State Mike Pompeo and British Prime Minister Boris Johnson even met in Downing Street. However, just how quickly a trade agreement can be concluded was demonstrated to the whole world by London, whose prime minister has been reiterating that it is possible to reach an agreement with Brussels in a few months. As you can see, it didn't work out for several months. And in the case of the United States, it is even more difficult, since in a few months it will no longer be US President Donald Trump to lead the country.

There are two main options for the development of events on July 23:

1) The outlook for the bulls continues to be very positive. Buyers have returned to the important level 1.2755. Thus, you are advised to stay with pound purchases while aiming for 1.2812 and 1.2846, if traders manage to confidently overcome the current target of 1.2755, from which the rebound occurred last time. Potential Take Profit in this case will amount to another 40 to 80 points.

2) Sellers are advised to start considering the possibilities of opening short positions with the targets of the Senkou Span B line (1.2565) and the support level of 1.2474, but for this they need to wait until the Kijun-sen line (1.2638) and the upward trend line have been overcome. Potential Take Profit ranges from 60 to 150 points.

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