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GBP/USD – 1H.
Hello, traders! According to the hourly chart, the pound/dollar pair performed a reversal in favor of the English currency and anchored above the downward trend corridor. Thus, the mood of traders, according to the hourly chart, changed to "bullish", which is a little unexpected for this pair. However, on the 4-hour chart, the picture looks more familiar. The growth of the British pound is still minimal, which means that the fall can resume at any time. Despite the fact that the British even shows a certain desire to start growing on the hourly chart, the information background remains clearly not in its favor. This is despite the fact that the entire world is mired in an economic crisis caused by the COVID-2019 pandemic. In other words, the problems are almost always the same. But for some reason, it is Britain that is experiencing the most serious financial problems. Not least because it is the country that the coronavirus epidemic has hit the most in Europe, and because the country's government cannot settle Brexit so as not to inflict a new blow on the British economy.
GBP/USD – 4H.
On the 4-hour chart, the pound/dollar pair, after rebounding from the corrective level of 50.0% (1.2303), performed a reversal in favor of the US dollar and continues to fall in the direction of the Fibo level of 38.2% (1.2095). The rebound of quotes from this level will allow traders to count on a reversal in favor of the British dollar and the resumption of growth to the level of 50.0%. Closing the pair's quotes above the Fibo level of 50.0% will similarly work in favor of the English currency and resume growth in the direction of the corrective level of 61.8% (1.2516). 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 British dollar and fixed above the Fibo level of 38.2% (1.2174), which allows traders to expect a continuation of the growth of quotes in the direction of the corrective level of 23.6% (1.2355). Thus, this chart supports the growth of quotes, and the rebound from the Fibo level of 38.2% occurred yesterday.
GBP/USD – Weekly.
On the weekly chart, the pound/dollar pair performed a false break of the lower trend line. Thus, before 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, but in the long term.
Overview of fundamentals:
No economic reports were released in the UK and the US on Monday. Thus, the information background was not available on May 25, which is evident even from the activity of traders.
The economic calendar for the US and the UK:
On May 26, the calendars of economic events in the UK and the US are again empty, so the information background for the pound/dollar pair today will continue to be absent.
COT (Commitments of Traders) report:
The latest COT report showed a sharp increase in the activity of major market players. The total number of open new contracts for the week up to May 19 was more than 25 thousand. Thus, major players began to pay attention to the pound. However, for the pound itself, this information is not too optimistic, since mainly new contracts led to its new fall. Despite the fact that in general, large players opened both short and long contracts in almost equal numbers, speculators looked more towards contracts for sale, opening 8 thousand at once. Thus, professional players believe that the British will continue to get cheaper and get rid of it. The graphical analysis coincides with the "bearish" mood of traders, but allows for a slight increase in quotes in the coming days, mainly due to the rebound from the corrective level of 38.2% on the daily chart.
Forecast for GBP/USD and recommendations to traders:
I recommend making new sales of the British pound in the current conditions with the goal of 1.1834 after fixing the quotes under the Fibo level of 38.2% (1.2095). I recommend buying the English currency after fixing the pair above the level of 1.2303 with the goal of 1.2516.
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.
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