GBP/USD – 1H.
Hello, traders! According to the hourly chart, the GBP/USD pair also generally continues the growth after fixing above the downward trend corridor. Thus, the mood for the British currency among traders is also "bullish". There are no graphical constructions at the moment, but an ascending corridor may be built in the near future. There is still very little news from the UK. Despite the fact that the UK is ranked third in the world in the number of cases of coronavirus infection, the authorities of this country want to start easing the quarantine in May. The total number of infections in the country is already 220 thousand, only 4 thousand remain in second place in Spain. However, both in Spain and Italy, the "curves" of infection are slowing down, meaning that the rate of infection growth is decreasing. But in Britain, the growth rate of infection remains high and does not decrease. Thus, the United Kingdom may suffer much more from the pandemic than other European countries. Combined with Brexit and the lack of trade deals with the EU and the US, the British economy may have a tough time in the coming years.
GBP/USD – 4H.
On the 4-hour chart, the GBP/USD pair rebounded from the corrective level of 50.0% (1.2303) and turned in favor of the English currency. As a result, the growth has started and continues in the direction of the Fibo level of 61.8% (1.2516). The rebound of the pair from this level or upper side line of the trend corridor will allow traders to expect a reversal in favor of the US dollar and the resumption of fall towards the level of 50.0% and lower lines of the side of the corridor. The mood of traders due to this corridor is now characterized as "neutral". Today, the divergence is not observed in any indicator.
GBP/USD – Daily.
On the daily chart, the pair's quotes performed a reversal in favor of the US currency and anchored under the corrective level of 50.0% (1.2463), which allows us to count on a fall in the direction of the Fibo level of 38.2% (1.2215). However, this is in the long term. On the two lower charts, quotes are expected to continue to grow.
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, there was no important news in the UK, and in the US - absolutely devastating reports on unemployment in April (14.7%) and Nonfarm Payrolls (20.5 million). Thus, traders got rid of the US currency for a reason. At the same time, the fall in the US dollar is not yet strong.
News calendar for the US and UK:
Today, May 11, in the UK and America, news calendars are empty. Thus, the information background will not put pressure on any of the currencies.
COT (Commitments of Traders) report:
On Friday, a new COT report for the week of May 5 was released. According to this report, professional market players got rid of long contracts (-3,252) and increased short (+2,054). However, in general, all changes in the number of contracts in all groups of traders are minimal. Major players continue to dislike the pound with their attention. The "Commercial" group was mainly engaged in reducing short contracts, and in general, during the reporting week, both types of contracts lost only 600 units, that is, almost equal and at the same time the minimum number. The overall advantage remains with customers, but it is also absolutely minimal. The number of contracts in the hands of professional traders does not exceed 100,000. For comparison, in euros - almost 300,000. Thus, the "neutral" mood of traders and not too active trading perfectly correlates with the nature of the COT report.
Forecast for GBP/USD and recommendations to traders:
I recommend continuing to buy the pound today with a target of 1.2516, as the hourly chart was completed closing above the trend corridor, and on the 4-hour chart - the rebound from the level of 50.0%. I do not recommend selling the pound yet, as there are no signals for this now.
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.
