GBP/USD – 1H.
According to the hourly chart, the GBP/USD pair quotes are near the corrective level of 161.8% (1.4136) for the third day. There was no rebound from this level, and overcoming it did not allow the pair to continue the growth process in the direction of the next Fibo level of 200.0% (1.4216). Thus, it is now better to analyze older charts, such as the daily chart. The British pound has failed to start falling over the past few days, although after a strong rise, this would be logical. Just half an hour ago, a large package of statistics was released in the UK, which showed that GDP in March increased by 1.4% compared to February, although traders expected an increase of only 1%. GDP for the first quarter decreased by 1.5%, and about the same figures were expected by traders. Industrial production increased in March by 1.8% m/m and 3.6% y/y - above forecasts. The trade deficit was well below traders' expectations. However, investment also declined by 11.9% in the first quarter. Thus, I would conclude that the entire statistics package is a little better in total than it could be. Therefore, the British pound may well continue to grow on this information. However, it is unlikely to be strong since this currency has already grown very much, which is seen on the older charts. So I don't expect strong growth until this afternoon when the US inflation report comes out. And here, everything will depend on the nature of this report. Because if inflation rises to 3.6% - 3.8% y/y, it will be a good reason for traders to start selling off the US currency again. If the real value is below forecasts, then perhaps we will see a pullback of the British dollar from the current highs.
GBP/USD – 4H.
On the 4-hour chart, the GBP/USD pair closed above the level of 1.4003, allowing traders to count on continued growth in the direction of the next corrective level of 0.0% (1.4240). There are no emerging divergences in any indicator today. There are no signals for a possible reversal in favor of the US currency.
GBP/USD – Daily.
On the daily chart, the picture is the most clear and accurate. Everything rests on the trend line, along which the movement of quotes of the pound/dollar pair continues. Closing the exchange rate under this line will favor the US currency and the beginning of the fall of quotes in the direction of the corrective level of 100.0% (1.3513). Until this happens, the growth process will continue at the corrective level of 161.8% (1.4812).
GBP/USD – Weekly.
The pound/dollar pair completed a close over the second downward trend line on the weekly chart. Thus, the chances of long-term growth of the pound remain.
Overview of fundamentals:
Bank of England Governor Andrew Bailey was scheduled to speak in the UK on Tuesday. However, nothing important was said. In the US, the calendar of economic events was empty.
News calendar for the United States and the United Kingdom:
UK - change in GDP (06:00 UTC).
UK - change in industrial production (06:00 UTC).
US - consumer price index (12:30 UTC).
US - consumer price index excluding food and energy prices (12:30 UTC).
On Wednesday, all the reports scheduled for the day have already been released in Britain, and so far, they have no special impact on the Briton. In the US, an important inflation report will be released today.
COT (Commitments of Traders) report:
The latest COT report from May 4 on the British dollar showed that speculators' "bullish" mood has become much weaker. And this is although the British dollar continues to grow, which is best seen on the long-term daily chart. Nevertheless, the "Non-commercial" category of traders closed 7,628 long contracts and opened almost 2 thousand short contracts during the reporting period. Thus, the mood of speculators has become much more "bearish." However, based on the movement of the Briton, we can conclude that this is a simple accident. The trend cannot be maintained upward if the most important category of traders does not buy the pair.
GBP/USD forecast and recommendations for traders:
It was recommended to buy the British dollar with a target of 1.4084 if there is a rebound from the trend line on the daily chart. At this time, this position should be kept open with a target of 1.4240. I recommend selling the pound if a close is made under the trend line on the daily chart with a target of 1.3513.
Terms:
"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.
"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy foreign currency, not for speculative profit, but to provide current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.
