Hot forecast and trading signals for the GBP/USD pair on July 13. COT report. Britain starts building customs points on the



The GBP/USD currency pair, unlike EUR/USD, remained inside the ascending channel on Friday, but the bulls failed to push through the resistance area of 1.2667–1.2687. Thus, at the moment either the bulls or the bears can prevail. The victory for the bulls can be awarded if the pair is pinned above the 1.2667–1.2687 area. In this case, we can expect the British currency to strengthen further within the ascending channel. Sellers also need to overcome the Kijun-sen line, which will automatically mean leaving the ascending channel and changing the trend to a downward one. Thus, the pair's quotes are now squeezed in a narrow price range and only an exit from it will indicate the further trend of the pair.



The lower linear regression channel turned up on the 15-minute timeframe, and the higher one turned sideways. This means that in the most short-term plan, the upward trend has not dried up, so market participants can expect a new upward movement in the new week. As for the COT report, it turned out to be absolutely logical and reflects the essence of what is happening for the pound/dollar pair in the currency market at the moment. Professional traders during the reporting week actively opened Buy-contracts (+6,743 contracts) and did not open Sell-positions (+12). Thus, the total net position in the commercial category immediately increased by 6,700. But the category of commercial market participants actively closed both Sell and Buy contracts. At the same time, Buy in much larger quantities. However, as we can see, this did not affect the overall strengthening of the British currency. In technical terms, there are no signs of ending the upward movement yet, so long positions remain relevant at the moment.

The fundamental background for the GBP/USD pair did not change much on the last trading day of last week, as well as on the weekend. Market participants are still waiting for the successful conclusion of negotiations between Brussels and London, but it seems unlikely to wait. The UK announced that it is going to spend 890 million euros on the construction and modernization of infrastructure at the borders. The British government's communique says that on January 1, 2021, Britain's stay in the European Union will end and the country will leave the bloc and the Customs Union, regardless of what agreement London will achieve in the negotiations. However, we believe that London itself is well aware that an agreement with the EU will not be achieved and is going to spend almost one billion euros on infrastructure that will provide customs and border checks at the borders with the EU. So far, this negative fundamental background has almost no effect on the pound, as traders are still paying more attention to the coronavirus epidemic in America, which is unclear how it will end for the country's economy. However, this cannot continue permanently. Britain and America are now, in fact, competing to see who has the worst news background. So far, the US is winning, so the greenback continues to fall in price. However, we still recommend that you closely monitor the technical data, as, for example, today the pair may be consolidated below the ascending channel and therefore begin to fall.

There are two main scenarios as of July 13:

1) The prospects for upward movement are preserved thanks to the ascending channel. A small correction that took place may be completed today. The price rebound from the lower border of the channel or the Kijun-sen line will signal the opening of new purchases with the goals of the resistance area of 1.2668–1.2688, but we still advise you to wait until this area has been overcome and only then open long positions with the goal of the resistance level of 1.2867. The potential Take Profit in this case will be from 160 points.

2) Sellers are still advised to wait until the pair consolidates below the ascending channel, and at the same time below the Kijun-sen line (1.2563). The downward trend will resume in this case, and the first targets for sell orders will be the support area of 1.2403–1.2423 and the support level of 1.2311. Potential Take Profit in this case will be from 110 to 230 points.

The material has been provided by InstaForex Company -