GBP/USD – 1H.
According to the hourly chart, the quotes of the GBP/USD pair performed a new reversal in favor of the US currency on Friday and fell to the corrective level of 161.8% (1.4136). The rebound from this level worked in favor of the British dollar and the resumption of growth in the direction of the Fibo level of 200.0% (1.4216). In general, the pound/dollar pair remains inside the sideways trend corridor, which I decided to plot on the chart. Thus, I believe that the bulls or bears will have an advantage in the market in the near future. The pair needs to get out of the specified corridor to understand what to expect next. Last Friday, several reports on the state of the economy were released in the United States. However, nothing could surprise traders. The personal income of the American population in April decreased by 13.1%, which is not surprising. Since March, all Americans were given money for nothing as part of the latest assistance package to the American economy. In April, there were no such gifts from the government, so the income fell. At the same time, expenses increased by only 0.5%, although a month earlier they showed an increase of 4.7%. I can't say that such statistics disappoint traders.
Nevertheless, the fall in the dollar's quotes in the second half of the day could be at least partly due to this statistic. In the UK, all the attention of traders is now focused on the Bank of England, which is one of the first developed countries in the world to signal its readiness to raise the key rate. However, we are still talking only about next year, and then only if the economic recovery will take place at a high pace. Nevertheless, representatives of the Bank of England are already thinking about tightening monetary policy to expect new interesting information at the next meeting.
GBP/USD – 4H.
On the 4-hour chart, 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 0.0% (1.4240). The rebound of quotes from this Fibo level will favor the US dollar and a new fall in the direction of the level of 1.4003. Closing above the level of 1.4240 will increase the probability of further growth of the pair.
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 quotes under this line will work in favor of the US dollar and start falling 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:
On Friday, there was no economic data in the UK, and in the US, reports showed weakness in Americans' income and spending compared to March, which could help the dollar fall in the afternoon.
News calendar for the United States and the United Kingdom:
On Monday, the calendars of economic events in the United Kingdom and America are empty, so today, the information background will be absent.
COT (Commitments of Traders) report:
The COT report of May 25 on the British dollar showed that speculators' "bullish" mood has become stronger. Thus, the British dollar can also continue its growth, although it has been trading extremely boring in the last two weeks. During the reporting week, speculators opened only 936 long contracts, but at the same time, reducing the number of short contracts on their hands by 4,693 units. I also note that, unlike the European currency, interest in the British dollar is declining among all categories of traders. In total, they closed 8 thousand contracts during the week.
GBP/USD forecast and recommendations for traders:
I recommend buying the British dollar if the pair performs a rebound from the lower border of the side corridor on the hourly chart, with a target of 1.4216. Or in the case of closing over a side corridor with a target of 1.4270. I recommend selling the pound sterling if there is a rebound from the upper limit of the corridor on the hourly chart with targets of 1.4136 and 1.4098.
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.
