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GBP/USD – 1H.
Hello, traders! According to the hourly chart, the GBP/USD pair failed to consolidate above the corrective level of 161.8% (1.2432). Thus, it rebounded from this level and fell to the Fibo level of 200.0% (1.2251), below which it also failed to close. However, despite the rebound from the level of 200.0%, the decline in quotes continues and there is a high probability of closing the pair's rate under the lower line of the ascending trend corridor. If this happens, then the mood of most traders will change to "bearish". And fixing the quotes below the Fibo level of 200.0% will significantly increase the probability of a further fall of the British dollar in the direction of the corrective level of 261.8% (1.1958). The situation with coronavirus is not improving in the UK, although the number of cases there is much lower than in the US. Boris Johnson remains in self-isolation, but 71-year-old Prince Charles has recovered.
GBP/USD – 4H.
As seen on the 4-hour chart, the GBP/USD pair performed a reversal in favor of the US currency and returned to the corrective level of 50.0% (1.2303). The rebound of the pair's exchange rate from this Fibo level, and at the same time from the lower line of the corridor on the hourly chart, will work in favor of the British currency and resume the growth process in the direction of the corrective level of 61.8% (1.2516). Today, the divergence is not observed in any indicator. Closing the pair's exchange rate below the Fibo level of 50.0% will increase the probability of a further fall in the direction of the next corrective level of 38.2% (1.2095).
GBP/USD – Daily.
On the daily chart, the picture remains the most interesting. The GBP/USD pair, after rebounding from the corrective level of 127.2% (1.1538), continues the growth process and secured above the Fibo level of 76.4% (1.2327). In fact, the pair is currently in the correction stage after falling to the level of 1.15. However, the current growth also needs a correction, since it is also very strong. Thus, a slight drop in quotes will not contradict the current picture of things, which suggests a further increase in the British dollar's quotes. But this option is the main one at the moment. Anchoring under the ascending corridor and correction levels on the hourly and 4-hour charts will make it more promising for the pound/dollar pair to fall.
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 two upper trend lines.
Overview of fundamentals:
There were no economic reports in the UK or the US on Monday. Donald Trump hopes that the peak of the coronavirus epidemic will take place in 2 weeks, and then the pandemic will go down. Steven Mnuchin, the US Treasury Secretary, said that the fundamentals of the US economy are currently satisfactory. That's all the news of the past day.
The economic calendar for the US and the UK:
UK - change in GDP (08:00 GMT).
US - consumer confidence indicator (16:00 GMT).
Today, on March 31, the information background will again be quite sparse. The report on UK GDP for the fourth quarter has already been released and amounted to 1.1% y/y, as expected by traders. That leaves only the US consumer confidence report.
COT report (Commitments of Traders):
A new COT report showed that in the week of March 24, the total number of long-contracts increased by 7,500 and the total number of short-contracts decreased by 3,500. This conclusion could be made by traders without the COT report, as the British dollar rose non-stop for seven days in a row. The total number of long contracts among major market players now exceeds the number of short contracts, which preserves good prospects for the growth of the British pound in the future. However, the markets are still in a state of shock. It is not known what the world will expect in the near future, since the spread of the epidemic has not yet been overcome. As we found out above, the Briton also needs a downward correction. Thus, the general mood of major players remains "bullish", but do not forget about graphical analysis and remember that COT reports are not indicators that predict the movement of the currency.
Forecast for GBP/USD and recommendations to traders:
The key graphical construction now is the channel on the hourly chart. Thus, the rebound of quotes from its lower line will allow you to buy the pair again with the goals of 1.2432 and 1.2596. I recommend selling the pound after closing quotes under the trend corridor on the hourly chart (and under the level of 1.2251) with goals of 1.2095 and 1.1958.
Terms:
"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.
"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy currency to ensure current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.
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