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GBP/USD – 1H.
According to the hourly chart, the quotes of the GBP/USD pair reversed in favor of the US currency and began the process of falling in the direction of the corrective level of 23.6% (1.3928). However, more and more senior charts show the continuation of the "bullish" trend, so the British dollar continues to grow despite many factors that should scare it. One of these factors is the position of Scotland concerning the preservation of membership in the UK. Let me remind you that five years ago, the majority of Scots voted to remain in the EU. However, Britain left the EU, and since then, Scotland and its leader Nicola Sturgeon are eager to return to the European Union and are even ready to leave the United Kingdom for this. What will happen on May 6? On this day, parliamentary elections will be held. Currently, the Scottish National Party, led by Nicola Sturgeon, has a majority in parliament and has the majority needed to make any important decisions. If the SNP gets an independent "majority government" after May 6, it will seek permission from London to hold its independence referendum. It is not yet clear how Nicola Sturgeon intends to get this permission, given that Boris Johnson flatly refuses to grant such a right, and without the permission of London, Scotland does not have the right to such actions. However, in campaign promises and speeches, Sturgeon has openly stated that if her party wins the election, the referendum will be held before the end of 2023. For the UK, these are potential problems and the potential loss of territories and part of the economy, which has already suffered from the pandemic and Brexit.
GBP/USD – 4H.
On the 4-hour chart, the GBP/USD pair, after the formation of a bullish divergence at the CCI indicator, resumed the growth process in the direction of the level of 1.4003, to which it remains just a little bit. A rebound from this level will allow us to expect a reversal in favor of the US dollar and a resumption of the fall in quotes in the direction of the Fibo level of 23.6% (1.3870).
GBP/USD – Daily.
On the daily chart, the pair's quotes resumed the growth process in the direction of the corrective level of 127.2% (1.4084), and the ascending trend line received new points, through which it now passes. The new closing of the quotes under the trend line will again allow us to count on a strong drop in the British quotes.
GBP/USD – Weekly.
The pound/dollar pair completed a close over the second downward trend line on the weekly chart. Thus, the chances of long-term growth of the pound remain.
Overview of fundamentals:
On Thursday, the calendar of economic events in the UK was empty, and in the US – several important reports did not interest traders at all.
News calendar for the United States and the United Kingdom:
US - main index of personal consumption expenditures (12:30 UTC).
US - changes in the level of spending and income of the population (12:30 UTC).
On Friday, the information background in the UK will remain empty, while in the US, only secondary reports will be released.
COT (Commitments of Traders) report:
The latest COT report from April 20 on the British was again very eloquent. The "Non-commercial" category of traders opened 10,523 long contracts and 8,205 short contracts during the reporting week. Thus, the first thing to note is the growth of the activity of major players. In total, 15,171 long contracts and 20,600 short contracts were opened during the reporting week. The activity grew in all categories of traders. The mood of speculators has become more "bullish," and the ratio of the number of long and short contracts focused on their hands remains approximately 2:1. The British can continue the growth process.
GBP/USD forecast and recommendations for traders:
I recommend buying the British dollar with a target of 1.4084 if there is a rebound from the trend line on the daily chart. I recommend selling the pound sterling if it is closed under the trend line on the daily chart with a target of 1.3513.
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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