GBP/USD – 1H.
According to the hourly chart, the GBP/USD pair quotes fell to the corrective level of 100.0% (1.4008) yesterday and a rebound from it. The rebound allows traders to expect a reversal in favor of the British dollar and a resumption of growth in the direction of the level of 161.8% (1.4136). However, the consolidation of quotes under the level of 1.4008 will increase the chances of a further fall in the direction of the levels of 1.3959 and 1.3929. The information background for the British yesterday was as weak as for the Europeans. Perhaps that's why the movements of both pairs were very similar. There are a lot of pressing and significant problems and issues in the UK right now. However, there is no news on them. In Scotland, the country's authorities are going to hold a referendum on independence from the UK. However, they promise to do it within the next 2.5 years. The Briton can not be impressed by this topic since nothing has happened yet. There are prerequisites for a possible exit of Scotland and the United Kingdom. The conflict on the island of Ireland seems to have subsided, but at any moment, it can break out with a new force. Yesterday, it became known that France may block further negotiations with the UK to improve relations, particularly in the financial services sector, which is so necessary for the British, because, according to Paris, London does not fulfill all the terms of the Brexit agreement. And as long as they do not meet them, talking about a new deal does not make sense. At this time, the British economy is losing 1.5% in the first quarter, and the British dollar continues to trade very high, which is best seen on the daily chart. Thus, there are simply no information topics that could impact the pound/dollar pair right now.
GBP/USD – 4H.
On the 4-hour chart, the GBP/USD pair fell to the level of 1.4003 and a rebound from it. A little earlier, a bullish divergence was formed at the CCI indicator. Thus, the pair could already perform a reversal in favor of the British dollar and now try to resume the growth process in the direction of the corrective level of 0.0% (1.4240). The closing of the pair's exchange rate at 1.4003 will work again in favor of the US currency and the resumption of the fall in the direction of the Fibo level of 23.6% (1.3870).
GBP/USD – Daily.
On the daily chart, the picture is the most clear and accurate. 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 quotes 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.
News overview:
On Thursday, the UK economic calendar was empty, except for Andrew Bailey's speech, which did not interest traders in any way.
News calendar for the United States and the United Kingdom:
US - retail trade volume change (12:30 UTC).
US - change in industrial production (13:15 UTC).
US - consumer sentiment index from the University of Michigan (14:00 UTC).
On Friday, the calendar of economic events in the UK does not show anything interesting, and in the US - the most interesting report will be on retail trade.
COT (Commitments of Traders) report:
The latest COT report from May 4 on the British dollar showed that speculators' "bullish" mood has become much weaker. And this is although the British dollar continues to grow, which is best seen on the long-term daily chart. However, the "Non-commercial" category of traders closed 7,628 long contracts and opened almost 2,000 short contracts during the reporting period. Thus, the mood of speculators has become much more "bearish." However, based on the movement of the Briton, we can conclude that this is a simple accident. The trend cannot be maintained upward if the most important category of traders does not buy the pair.
GBP/USD forecast and recommendations for traders:
It is recommended to buy the British dollar with a target of 1.4240 if there is a rebound from the level of 1.4003 on the 4-hour chart. I recommend selling the pound if a close is made under the level of 1.4003 on the 4-hour chart with a target of 1.3870.
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.