GBP/USD – 1H.
Hello, traders! According to the hourly chart, the pound/dollar pair performed a reversal in favor of the British currency and began the growth process on Friday, April 24, which continues today. Thus, the pair's quotes still left the previous downward trend corridor, and the general mood of traders changed to "bullish". I built a new trend corridor, this time ascending, and at the moment the pair has already worked out its upper line. Thus, I expect the pair to rebound from this line and start falling in the direction of the lower line of the corridor. At the same time, the pair can close over the corridor, which will only strengthen the "bullish" mood. In the latest news, I note Boris Johnson's recovery from the coronavirus. The Prime Minister should proceed to the execution of their duties. Just in time, because criticism of Johnson has increased in recent weeks. Many believe that it is thanks to the Prime Minister and his government that the UK was completely unprepared for the epidemic and now shows high levels of mortality and morbidity.
GBP/USD – 4H.
On the 4-hour chart, the pound/dollar pair, after the formation of a bearish divergence at the CCI indicator, performed a fall to the corrective level of 50.0% (1.2303), but the rebound of quotes from this level worked in favor of the British and the resumption of the growth process in the direction of the corrective level of 61.8% (1.2516). Thus, on the 4-hour chart, a signal to buy was also received, as well as on the hourly chart. At the same time, it is not clear how long the growth of the British pound will continue, given the lack of reasons for its growth. This week there will be a large number of economic reports from the US, which will be able to show whether the hopes of buyers of the dollar are justified. If so, the US currency will be able to resume the growth process.
GBP/USD – Daily.
On the daily chart, the pair's quotes performed a reversal in favor of the English currency and returned to the corrective level of 50.0% (1.2463). The rebound of quotes from this level will work in favor of the US dollar and resume the fall in the direction of the corrective level of 38.2% (1.2215).
GBP/USD – Weekly.
On the weekly chart, the pound/dollar pair performed a false breakdown of the lower trend line. Thus, until the pair's quotes are fixed under this line, there is a high probability of growth in the direction of the top two trend lines, but in the long term.
Overview of fundamentals:
On Friday, the UK released reports on changes in retail trade volumes with and without fuel costs, which, of course, decreased compared to February by 5.8% and 4.1%, respectively. However, the report on the long-term use of goods in the US was also extremely weak. It ended with the growth of the pound.
News calendar for the US and UK:
Today, April 27, the UK and US news calendars do not contain any important information.
COT (Commitments of Traders) report:
A new COT report showed an overall increase in the number of long and short contracts. This means that major market players are beginning to slowly increase their positions in the market. However, overall trading volumes remain fairly low. During the reporting week, the total number of longs increased by 8,668 contracts, and shorts - by 5,885. The overall advantage also remains for long positions and it is also minimal. A larger number of longs are also focused on the hands of a separate group of hedgers. But for a group of speculators, equality is almost complete - 31,000 short and long. Thus, since it is generally assumed that speculators drive markets, this judgment is now untenable. Speculators last week increased just short-contracts, which was not enough to resume the downward trend.
Forecast for GBP/USD and recommendations to traders:
I recommend selling the pound today with a target of 1.2303 if the rebound from the corrective level of 61.8% on the 4-hour chart is completed. I do not recommend considering buying the pound yet since the quotes have already made growth to the upper line of the corridor on the hourly chart.
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.
