GBP/USD – 1H.
Hello, traders! According to the hourly chart, the pound/dollar pair performed a consolidation over the downward trend corridor. However, immediately after that, it performed a reversal in favor of the US currency and began falling. Thus, the situation on the hourly chart is twofold. On the one hand, the pair left the downward corridor, on the other hand, the 4-hour chart does not confirm the intention of traders to start buying the pair. Thus, now you should observe what is happening a little and understand which of the formed signals is false. No important information has been received from the UK in recent days. According to the latest data, Prime Minister Boris Johnson is returning to his duties after a coronavirus illness. Britain remains one of the most infected European countries, approaching Germany and France, where growth is slowing slightly. The country's death rate remains one of the highest in the world.
GBP/USD – 4H.
As seen on the 4-hour chart, the pound/dollar pair continues to trade above the corrective level of 50.0% (1.2303). Thus, certain chances of continued growth remain. However, yesterday a bearish divergence was formed in the CCI indicator, which allows traders to count on a reversal in favor of the US currency and the beginning of the process of falling quotes. However, given some ambiguities in the hourly chart, I recommend waiting for the closing of the pound/dollar pair under the Fibo level of 50.0% (1.2303), which will significantly increase the probability of continuing the decline of the British pound.
GBP/USD – Daily.
On the daily chart, the pair's quotes performed a reversal in favor of the US currency and secured under the corrective level of 50.0% (1.2463). Thus, the pair can resume the process of falling quotes in the direction of the next corrective level of 38.2% (1.2215).
GBP/USD – Weekly.
On the weekly chart, the pound/dollar pair performed a false break of the lower trend line. Thus, before the pair's quotes are fixed under this line, there is a high probability of growth in the direction of the two upper trend lines, but in the long term.
Overview of fundamentals:
On Thursday, the UK also released reports on business activity in the services and manufacturing sectors, which, as well as in all of Europe, were extremely weak.
News calendar for the US and UK:
UK - change in retail trade volume with and without fuel costs (08:00 GMT).
US - change in the volume of orders for long-term goods (14:30 GMT).
Today, April 24, the first report of the day has already been released - British retail sales, which, of course, decreased compared to February by 5.8% and 4.1%, respectively. In the second half of the day - comparable with the first report on the importance of the durable goods orders report for use in the United States.
COT (Commitments of Traders) report:
The latest COT report was released on Friday and showed a minimal increase in interest among major market players in the British currency. However, this growth is so minimal that it is impossible to draw a conclusion about the growth of interest in general. The total increase was only about 3,000 contracts for both groups - short and long. Thus, I believe that the pound remains an extremely unattractive currency for major market players. For example, speculators have now concentrated in their hands the minimum number of contracts for a long time - only about 80,000. And the total number of contracts is now about 320,000. For comparison, the total number of euro contracts is more than a million. There were no major changes during the reporting week. For all categories of traders, changes are minimal - plus or minus 2-3 thousand. The minimum advantage remains on the side of the bulls, as the total number of long contracts exceeds short by 7,000.
Forecast for GBP/USD and recommendations to traders:
I believe that today we should sell the pound with a target of 1.2095 if we close under the corrective level of 61.8% on the 4-hour chart. I do not recommend buying the pound yet, as the last signal turned out to be false.
Terms:
"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.
"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy currency, not for speculative profit, but to ensure current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.
