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GBP/USD – 1H.
Hello, traders! According to the hourly chart, the pound/dollar pair performed a new reversal in favor of the English currency near the lower border of the new upward trend corridor, thus indicating the intention to resume the growth in the direction of the upper border of the corridor. Fixing the pair's exchange rate under the corridor will work in favor of the US dollar and the resumption of the fall. There is still very little news and reports coming from the UK. To be more precise, none have arrived this week. And it won't come, because the calendar of economic events for Britain is empty throughout the week. Thus, traders can only wait until any new information is received about negotiations with Brussels or if Prime Minister Boris Johnson makes an important and new statement. So far, the UK is just recovering from the coronavirus pandemic and has not yet restored the work of Parliament. The spread of the epidemic in the UK seems to have been slowed down, so the country is also gradually easing the quarantine.
GBP/USD – 4H.
As seen on the 4-hour chart, the pound/dollar pair increased to the corrective level of 23.6% (1.2354) on the new grid of Fibo levels and rebounded from it with a reversal in favor of the US dollar. Thus, the fall of quotes can be continued in the direction of the corrective level of 38.2% (1.2172), however, the ascending corridor on the hourly chart, on the contrary, predicts further growth of the pair. Thus, to continue the fall in the British dollar's quotes, it is necessary to wait for the closing under the trend corridor. And so far, the pair's growth is more likely. Fixing the exchange rate above the Fibo level of 23.6% will further increase the chances of growth towards the next corrective level of 0.0% (1.2647).
GBP/USD – Daily.
According to the daily chart, the pair's quotes rebounded from the corrective level of 23.6% (1.2355) and began falling towards the corrective level of 1.2174 yesterday. However, the omission is also true for the daily chart - until there is closure under the corridor on the hourly, further growth of the pair is expected.
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 top two trend lines, but in the long term.
Overview of fundamentals:
On Wednesday, the UK and the US again did not release any economic reports. Thus, the information background was empty for the third day in a row. However, the activity of traders remains quite high.
The economic calendar for the US and the UK:
US - change in the volume of orders for long-term goods (14:30 GMT).
US - change in GDP for the quarter (14:30 GMT).
US - number of initial and repeated applications for unemployment benefits (14:30 GMT).
On May 28, the calendar of economic events is again empty in the UK. However, today, there will be quite interesting reports in the US, which I do not recommend skipping. If the forecasts come true, the US currency may fall in price in the afternoon.
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. The British pound has been in demand for the current week, so we can even assume that the major players have moderated their "bearish" mood a little this week. In the new COT report, we can see a bigger increase in long contracts than short. In any case, the growth of the British pound is still limited to the level of 23.6% (1.2355) on the daily chart. Thus, the "bearish" mood of major market players may increase at any moment, and the British pound may resume its decline.
Forecast for GBP/USD and recommendations to traders:
I recommend making new sales of the pound in the current conditions with the goals of 1.2172 and 1.2025 if the pair closes under the trend corridor on the hourly chart. You can buy the English currency now since a reversal was performed near the lower border of the corridor. The goal is the upper line of the corridor. Or after fixing the pair above the level of 1.2351 with the goal of 1.2646.
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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