07.07.202002:21 Forex Analysis & Reviews: Overview of the GBP/USD pair. July 7. Donald Trump is once again in conflict and accuses the experts of Goldman Sachs lowers forecasts for the US economy.

4-hour timeframe

Technical details:

Higher linear regression channel: direction - upward.

Lower linear regression channel: direction - downward.

Moving average (20; smoothed) - upward.

CCI: 66.4680

On the first trading day of the week, the pound rose slightly in price. The pair managed to return to the Murray level of "5/8"-1.2512, from which it bounced on Thursday. However, traders managed to keep the pound/dollar pair above the moving average line, so the upward movement can be continued, and the upward trend has been maintained. At the same time, without overcoming the Murray level of "5/8", we will tend to resume the downward trend, since the level of 1.2512 is also the previous local maximum, without overcoming which further growth of the pound is impossible. As for the fundamental component, we have already said in previous articles that Britain and the US now seem to be competing in who is worse off in the country. In the United States, the "coronavirus" continues to rage, President Donald Trump continues to do everything to be re-elected, and not everything to defeat the epidemic and save the lives of Americans. Rallies and protests against racism only worsened the situation with the epidemic and again showed Trump not for the better. In addition, relations with China continue to slowly heat up. In Britain, negotiations with Brussels remain in a "failed" status, quarantine has ended, as announced by Prime Minister Boris Johnson, and doctors and representatives of the healthcare sector immediately declared that they were waiting for new waves of the epidemic, since the British didn't observed its rules, and now rushed to the streets of cities and to public places. Thus, Britain may soon face a new outbreak of the "coronavirus" epidemic.

However, the key topic for the British pound is still "negotiations with the EU". However, last week, the EU's chief negotiator, Michel Barnier, said that serious differences remain between the parties, and no progress has been made in the negotiations. "Our goal was to successfully and quickly set the negotiations on a trajectory to reach an agreement. However, after four days of discussion, serious differences remain," he said last Thursday. The next round of negotiations is scheduled for the end of July, however, experts are already skeptical of new negotiations between Brussels and London, believing that it will also not yield any positive results. At the same time, the head of the European Commission, Ursula von der Leyen, said that the European Union seeks to conclude an agreement with London, but is not ready to achieve it at any cost. In fact, the position of Brussels remains unchanged: there will be no concessions to London, since it is London that should fear the absence of an agreement, not Brussels.

Meanwhile, in the US, the pun called "election race" continues. Recently, US President Donald Trump did not miss the opportunity to once again prick his opponent and expressed confidence that Joe Biden is unlikely to pass an IQ test. Well, while Biden and Trump are teasing each other, official Washington, apparently, is preparing to impose new sanctions against Hong Kong and Beijing. It is reported that at this time, the White House is considering the possibility of introducing new sanctions due to the adoption by Beijing of the law "on national security in Hong Kong'', which, in fact, deprives Hong Kong of the status of an autonomous region. Experts believe that Washington will continue to put pressure on Beijing to repeal this law. At the same time, the White House is unlikely to go for an open confrontation, as Donald Trump is very afraid of the termination of the trade deal reached in January, as this event could further hit his political ratings. Also, Trump wants to avoid the introduction of new trade sanctions, as they can hit the American economy even harder. Thus, the new sanctions may affect some Chinese officials personally, rather than China or Hong Kong as a whole. Although the latter is likely to lose a number of trade preferences, which will mean the death of this district as an independent economic unit from Beijing.

The authorities of some states of America did not have time to renew quarantine (more precisely, to introduce some restrictive measures because of the high spread of the virus), as the investment bank Goldman Sachs has already lowered its GDP forecasts for the USA for 2020. Goldman Sachs economists believe that the new restrictions in a number of states will have a negative impact on the economy and growth in the third quarter will not be as strong as previously seen. Goldman Sachs experts believe that the US economy will grow by 25% in the third quarter, whereas earlier forecasts were +33%. Thus, the bank notes, in total, according to the results of 2020, the US economy may lose 4.6% by the end of 2020, and not 4.2%, as previously expected. Well, we remind you that the "coronavirus" continues to spread across the United States, so it is possible that quarantine measures will continue to increase, and other states will follow the examples of Texas and Florida.

Well, Donald Trump last week managed to "tease" not only Biden, but also to remember who is to blame for the COVID-2019 epidemic, making another unproven statement. This time, Trump said that "China's deception, secrecy and attempts to cover their tracks" resulted in the virus infecting 189 countries around the world. Therefore, Trump believes China should be punished. The American President also said that not only did the "coronavirus" come from China,but there are other viruses that broke free from this country. However, the US leader did not say what viruses they were, and did not provide evidence of China's guilt, which he promised to provide "in a few weeks" a few months ago.

On Monday, the United States published business activity indices in the service sector according to the ISM and Markit versions. The first of these indices rose to an impressive 57.1 with a forecast of 50.1. The second – up to 47.9. However, in any case, the indices rose, and the more significant is the ISM, which went to the area "above 50.0". However, the US dollar did not rise much on these reports. No major publications are scheduled for Tuesday in the UK and US.

The average volatility of the GBP/USD pair continues to remain stable and is currently 91 points per day. For the pound/dollar pair, this indicator is "average". On Tuesday, July 7, thus, we expect movement within the channel, limited by the levels of 1.2398 and 1.2580. Turning the Heiken Ashi indicator down will indicate a new round of downward correction.

Nearest support levels:

S1 – 1.2451

S2 – 1.2390

S3 – 1.2329

Nearest resistance levels:

R1 – 1.2512

R2 – 1.2573

R3 – 1.2634

Trading recommendations:

The GBP/USD pair is fixed above the moving average on the 4-hour timeframe, however, it cannot overcome the level of 1.2512. Thus, today it is recommended to buy the pound/dollar pair with the goals of 1.2573 and 1.2634 and keep them open until the Heiken Ashi indicator turns down, if traders manage to overcome the level of 1.2512. It is recommended to sell the pair after the reverse consolidation of quotes below the moving average with the first goals of 1.2390 and 1.2329.