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 and continues the growth within the corridor. Thus, the mood of traders is still characterized as "bullish". There is still little news from the UK, however, there was something yesterday. From the entourage close to Boris Johnson, it became known that the Prime Minister is going to personally visit Brussels in June and hold talks with top officials of the European Union on a trade agreement. In fact, the agreement is not only a trade agreement, it will determine the relationship between Britain and the EU in all areas of life and economy after Brexit is completed. It's hard to say if this is good news for the pound. Negotiations will not be held soon, and the chances that Brussels will give in to Boris Johnson more than David Frost's team are not that great. Thus, Boris Johnson is risking in vain to go to Brussels and come back with nothing. But perhaps this is what London needs?
GBP/USD – 4H.
As seen on the 4-hour chart, the pound/dollar pair returned to the corrective level of 23.6% (1.2354). Thus, the rebound of quotes from this level will work in favor of the US currency and the beginning of a fall in the direction of the corrective level of 38.2% (1.2171). Closing the pair's rate above this level will allow traders to expect continued growth in the direction of the next corrective level of 0.0% (1.2647). Today, the divergence is not observed in any indicator.
GBP/USD – Daily.
On the daily chart, the pair's quotes performed a rebound from the corrective level of 23.6% (1.2355), so traders can count on the process of falling in the direction of the corrective level of 38.2% (1.2174). However, until there is a close under the corridor on the hourly chart, further growth of the pair is preferable.
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 Thursday, the UK again did not release any economic reports. And reports from the US were extremely weak and led to a fall in the US currency. Traders were especially disappointed with the US GDP.
News calendar for the US and UK:
US - change in the level of expenditure and income of the population (14:30 GMT).
US - consumer sentiment index from the University of Michigan (16:00 GMT).
On May 29, the UK's calendar of economic events is again empty. In America, not the most important reports will be released, so the information background for the pair today will be weak.
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 1.2355 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.