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GBP/USD – 1H.
According to the hourly chart, the quotes of the GBP/USD pair moved all day yesterday, fighting off one level of correction, then another, which is visible in the picture. In the end, the pair's quotes reversed in favor of the British dollar and closed above the Fibo level of 61.8% (1.3764). Thus, the growth process can be continued in the direction of the next corrective levels of 50.0% (1.3793) and 38.2% (1.3822). If only the US inflation report was important for the euro yesterday, then the morning package of statistics from the UK was also very important for the British dollar. Without going deep into the numbers, I can say that the GDP report was unclear. This is not the GDP data that everyone is used to – quarterly and annual. These were data for February alone, which do not allow us to draw accurate conclusions about the state of the economy in the first quarter of 2021. The report on industrial production was more familiar and showed an increase in production volumes by 1.0% m/m in February. Therefore, the Briton still showed a restrained growth on Tuesday morning. However, this growth did not even end with consolidation above the Fibo level of 61.8% (1.3764), from which a rebound followed. Thus, the British reports had almost no impact on traders and the pair. The US inflation report led to the pair jumping up and down, which quickly ended, and the British pound then began a new growth, as did the European currency based on too much-increased inflation. Today, Jerome Powell will be able to comment on the inflation report, as it is from him that traders are waiting for statements about the curtailment of the quantitative stimulus program and comments on inflation, from which everyone expected strong growth in 2021.
GBP/USD – 4H.
On the 4-hour chart, the GBP/USD pair consolidated under the ascending trend line. Thus, the mood of traders is now characterized as "bearish", and the fall in quotes can be continued in the direction of the next corrective level of 38.2% (1.3642). Closing quotes below this level will increase the probability of a further fall in the direction of the next Fibo level of 50.0% (1.3457).
GBP/USD – Daily.
On the daily chart, the pair's quotes made another attempt to close under the ascending trend line, and this time it looks like a successful one. Thus, the fall in quotes can be continued in the direction of the corrective level of 100.0% (1.3513).
GBP/USD – Weekly.
On the weekly chart, the pound/dollar pair completed a close over the second downward trend line. Thus, the chances of long-term growth of the pound remain.
Overview of fundamentals:
On Tuesday, quite important reports were released in the UK and the US, which influenced the movement of the pair and the mood of traders.
News calendar for the United States and the United Kingdom:
US - Federal Reserve Board of Governors Chairman Jerome Powell will deliver a speech (16:00 UTC).
On Wednesday, the calendar of economic events in the UK is empty, however, in the US, there will be a speech by Jerome Powell, which can greatly affect the pound/dollar pair.
COT (Commitments of Traders) report:
The latest COT report of April 6 on the British dollar again showed the lack of a strong desire among traders to deal with this currency. During the week, speculators closed another 2,614 long contracts and opened 2,120 short contracts. Thus, their mood has shifted a little more in the direction of "bearish". Although in general, the situation is the same as for the European – the number of long contracts focused on the hands of the category of "Non-commercial" traders is twice as large (or so) as the number of short contracts. Thus, the mood of speculators is still characterized as "bullish", so the growth of the British dollar may well be resumed. But now the charts of the pair's movement must form the corresponding graphical structures that support growth (trend lines, corridors).
GBP/USD forecast and recommendations for traders:
I do not recommend buying the British dollar now, as the quotes have closed under the ascending corridor on the hourly chart and there are similar closures on the older charts. I recommend selling the pound sterling at the close of quotes under the level of 61.8% (1.3764) on the hourly chart with the targets of 1.3728 and 1.3670.
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.
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