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GBP/USD – 1H.
According to the hourly chart, the GBP/USD pair quotes performed a consolidation above the corrective level of 161.8% (1.4136). Thus, the growth process can be continued towards the next Fibo level of 200.0% (1.4216). The rising trend line still characterizes the current mood of traders as "bullish." Only the closing of quotes under the trend line will favor the US currency and its medium-term decline. Meanwhile, Boris Johnson has further relaxed quarantine restrictions in the UK, following exactly the four-step plan to lift the quarantine completely. Since yesterday, the British are allowed to gather in large companies, celebrate weddings, travel abroad, and open almost all public institutions. The full quarantine can be lifted on June 21. Also, in the UK, vaccination continues at a high rate. The optimism of bull traders is understandable. However, let me remind you that quarantine restrictions are also being lifted in the United States, and vaccination is proceeding at a high rate. Thus, the US dollar is falling, and the pound is growing not because of vaccination. The same goes for the economy. Since the US economy is now growing much faster than the British one, it would be much more logical to see the growth of the dollar. London's relations with the European Union remain tense. Let me remind you that France recently made statements accusing London of failing to comply with all the terms of the Brexit agreement. Thus, Paris sees no point in concluding new agreements with the UK. And earlier, Brussels went to court because London unilaterally changed and violated several provisions of the "Northern Ireland protocol." At the moment, Boris Johnson has offered the European Union a solution to this problem. However, the reaction of Brussels is still unknown.
GBP/USD – 4H.
On the 4-hour chart, the GBP/USD pair performed a rebound from the level of 1.4003 in conjunction with the bullish divergence of the CCI indicator. Since then, the growth process has continued, which is now integrated into the uptrend corridor, which also characterizes the mood of traders as "bullish." Traders will be able to count on the growth of the dollar after the pair is fixed below the ascending corridor.
GBP/USD – Daily.
On the daily chart, everything rests on the trend line, along which the movement of quotes of the pound/dollar pair continues. Closing the exchange rate under this line will favor the US currency and the beginning of the fall of quotations in the direction of the corrective level of 100.0% (1.3513). Until this happens, the growth process will continue at the corrective level of 161.8% (1.4812).
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 Monday in the UK, the calendar of economic events contained several speeches by members of the Central Bank of England. However, nothing interesting was reported by Silvana Tenreyro and Andy Haldane.
News calendar for the United States and the United Kingdom:
UK - change in the number of applications for unemployment benefits (06:00 UTC).
UK - unemployment rate (06:00 UTC).
UK - change in the level of average earnings (06:00 UTC).
UK - hearing of the economic affairs committee in the House of Lords (14:00 UTC).
UK - Bank of England Governor Andrew Bailey will deliver a speech (14:00 UTC).
On Tuesday, the calendar of economic events in the United States is empty, and in Britain, Andrew Bailey will give a speech. Several important reports will be released, and there will be a hearing of the economic affairs committee in the House of Lords.
COT (Commitments of Traders) report:
The COT report of May 4 on the British dollar showed that speculators' "bullish" mood has become much weaker. But the latest report of May 11 showed a sharp increase in long contracts in the category of "Non-commercial" traders. Their number increased by 15,059, while the number of short contracts increased by only 6,058. Thus, the mood of speculators has again become more "bullish," which further improves the prospects for the British dollar. As you can see, the COT reports on the European and British currencies support the further growth of these currencies.
GBP/USD forecast and recommendations for traders:
It is still recommended to buy the British dollar with a target of 1.4240, as a rebound from the level of 1.4003 was made on the 4-hour chart. I recommend selling the pound if a close is made under the ascending trend line on the hourly chart with a target of 1.3959.
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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