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GBP/USD – 1H.
Hello, dear trades! On the H1 chart, GBP/USD fell to the 76.4% retracement level, 1.3721, and rebounded from it several times. Nevertheless, the upward trend has not started. Thus, I expect the price to close below the 76.4% retracement level. The pair is likely to go down to 1.3625. Yesterday, Fed's chair Jerome Powell delivered a speech. He mainly focused on the coronavirus situation and not on the economy or monetary policy. According to the chairman, uneven vaccination worldwide poses additional threats to the global economic recovery. "Viruses are no respecters of borders, and until the world really is vaccinated, we're all going to be at risk of new mutations and we won't be able to really resume with confidence all around the world," he said.
Powell noted that the US economic recovery is limited and uneven. New possible COVID-19 waves can have an adverse impact on the US economy. However, their effects are likely to be modest in comparison to the blow delivered by the previous waves. Powell urged the American population to continue wearing masks, keep social distancing, and take their vaccine shots. The chairman said that the Fed is committed to continue supporting the economy. Thus, Powell hinted at the possibility of keeping monetary policy unchanged in 2021. Yesterday's data on US jobless claims turned out to be higher than traders had expected. Yesterday, the greenback did not incur losses.
GBP/USD – 4H.
Based on the H4 chart, GBP/USD reversed and consolidated below the ascending trend line. Trader sentiment turned bearish. The quotes may fall to the 38.2% correction level, 1.3642. None of the indicators shows divergence.
GBP/USD – Daily.
On the daily chart, GBP/USD has again tried to close below the ascending trend line. It is hard to tell whether it will be a successful attempt this time since the two previous ones have failed.
GBP/USD – Weekly.
On the weekly chart, GBP/USD closed above the second descending trend line. The long-term upward trend is likely.
News background:
On Thursday, the United Kingdom delivered its construction PMI report. The results turned out to be well above market expectations.
On Friday, the United States will present its PPI data.
COT report (Commitments of traders):
COT report (Commitments of Traders):
The COT report as of March 30 revealed the unwillingness of large market players to deal with the pound sterling. Non-commercial traders closed 4,719 Long contracts and 6,829 Short contracts. In March, speculators were actively closing both Long and Short contracts. The COT report as of February 23 showed a twofold difference between the total number of Long and Short contracts among speculators. Meanwhile, the March report revealed a decrease in the number of contracts, while the twofold difference remained. This means that sentiment is still bullish and a new upward trend is highly likely.
GBP/USD forecast and trading recommendations:
Traders should refrain from buying GBP/USD because the quotes closed below the ascending corridor on the H1 chart. Traders may sell the pair if the price closes below the ascending corridor on the H1 chart or below the trend line on the H4 chart with the targets set at 1.3721 and 1.3634. In fact, the price has already reached the first target. Traders can consider selling the pair after the price breaks the 1.3634 target.
TERMS:
Non-commercial traders are major market players such as banks, hedge funds, investment funds, private, and large investors.
Commercial traders are commercial enterprises, firms, banks, corporations, and companies that buy currency not to obtain speculative profit, but to ensure current activities or export-import operations.
Non-reportable positions are small traders who do not have a significant impact on the price.
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