GBP/USD – 1H.
According to the hourly chart, the quotes of the GBP/USD pair performed a new reversal in favor of the British dollar and resumed the growth process in the direction of the corrective level of 200.0% (1.4216). The pair's quotes are still above the ascending trend line, which characterizes the current mood of traders as "bullish." A new rebound from the level of 200.0% (1.4216) will work in favor of the US currency, and some fall in the direction of the trend line. However, traders will only be able to count on a strong drop in the pair's quotes below the trend line. Closing the exchange rate above the level of 200.0% will increase the probability of further growth towards the next Fibo level of 261.8% (1.4344).
Meanwhile, the information background of the last day was not available for the pair. Traders quickly recovered the pound/dollar from the fall on Wednesday, which occurred due to the publication of the Fed minutes. As it turned out a little later, the interpretation of the possible curtailment of the quantitative stimulus program, which was present in the protocol, does not have any special significance. First, several weeks have passed since the Fed meeting itself, and several important economic reports have been released in the US. Therefore, we can already say that the situation has changed. Second, Jerome Powell and other FOMC members continue to say that the economy is recovering very unevenly, and some of its sectors are lagging. Therefore, we are not talking about any curtailment of the QE program in the near future. Thus, bear traders very quickly lost all the advantages gained after Wednesday. A report on British inflation helped bull traders to return to the market.
GBP/USD – 4H.
On the 4-hour chart, the GBP/USD pair performed a reversal in favor of the British dollar and is currently trying to resume the growth process in the direction of the corrective level of 0.0% (1.4240). Let me remind you that the point of 1.4240 is the maximum for the British for the last three years. Thus, fixing the pair above this level will work in favor of continuing the growth of quotes. However, the upward trend is still present on all charts.
GBP/USD – Daily.
On the daily chart, everything still 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 performed 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:
On Thursday, the UK's economic calendar was completely blank. In the US, there was also no important information. There was practically no information background.
News calendar for the United States and the United Kingdom:
UK - retail trade volume change (06:00 UTC).
UK - manufacturing PMI (08:30 UTC).
UK - PMI index for the service sector (08:30 UTC).
US - index of business activity in the manufacturing sector (13:45 UTC).
US - PMI index for the service sector (13:45 UTC).
On Friday, reports on business activity in various sectors of the economy will be released in the UK and America. The most important will be the report on retail trade in Britain, which will be released in the next half hour.
COT (Commitments of Traders) report:
The COT report of May 4 on the British dollar showed that speculators' "bullish" mood has become much weaker. But the latest report of May 11 showed a sharp increase in long contracts in the category of "Non-commercial" traders. Their number increased by 15,059, while the number of short contracts increased by only 6,058. Thus, the mood of speculators has again become more "bullish," which further improves the prospects for the British dollar. As you can see, the COT reports on the European and British currencies support the further growth of these currencies.
GBP/USD forecast and recommendations for traders:
It is recommended to buy the British dollar with the targets of 1.4216 and 1.4240 if a new rebound is made from the trend line on the hourly chart or from the trend line on the 4-hour chart. Over the past day, there were no such signals. I recommend selling the pound if a close is made under the ascending trend line on the hourly chart with the targets of 1.4008 and 1.3959.
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 support current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.
