GBP/USD – 1H.
According to the hourly chart, the GBP/USD pair quotes rebounded from the corrective level of 100.0% (1.4008) and began a new growth process, closing above the Fibo level of 127.2% (1.4064). Thus, the growth of quotes can be continued in the direction of 161.8% (1.4136). The rising trend line keeps the current mood of traders "bullish." Closing under it will allow traders to count on a more or less strong drop in the pair's quotes. The information background for the British is almost empty at this time. On Friday, the pound was in demand based on the same weak statistics from America. But in general, the UK economy is also weaker than in the US. Thus, the growth of the European currency and the British currency does not look quite logical in the current circumstances.
However, let me remind you that in the US, investors and traders are now afraid of high inflation, which in April was 4.2% and may well continue to increase. Markets mostly fell last week, which means a sell-off in securities and other assets. Thus, the US dollar is now under pressure due to the Fed's inaction, which abandoned the idea of reducing the quantitative easing program in the coming months and announced that the US economy is recovering quickly but unevenly. Therefore, the incentive process will continue for quite an extended period. And if the stimulus continues, then inflation may continue to rise. It scares the traders, and they get rid of the Americans at this time. Bank of England representatives Silvana Tenreyro and Andy Haldane will speak in the UK today. A few months ago, Silvana Tenreyro hinted at a possible new reduction in the key rate. Perhaps today there will be new information about this.
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 upward trend corridor, maintaining a bullish attitude. 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 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.
Overview of fundamentals:
On Friday, the calendar of economic events in the UK was empty, and news from America led to a new fall in the US currency.
News calendar for the United States and the United Kingdom:
UK - Bank of England MPC member Silvana Tenreyro will deliver a speech (14:15 UTC).
UK - Bank of England MPC member Andy Haldane will deliver a speech (16:30 UTC).
On Monday, the calendar of economic events in the United States is empty, and in Britain, Silvana Tenreyro and Andy Haldane will speak. But it is not known whether they will say anything important to traders.
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 15059, 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.