FX.co ★ Technical analysis of GBP/USD for April 12. COT Report

GBP/USD – 1H.

Hello, dear traders! On the H1 chart, GBP/USD fell to the 100.0% retracement level of 1.3670, rebounded from it, increased to the 76.4% Fibo level of 1.3728, and returned to the 100.0% retracement level. In case of another rebound from this level, the price may go up to 1.3728 and even 1.3764. If the pair closes below 1.3670, the bearish trend may extend to the 127.2% Fibo level of 1.3603. Meanwhile, mass demonstration took place across Ireland. Tens of thousands of people have taken to the streets to protest against the introduction of water charges in the Republic of Ireland.

Under the 1998 Good Friday Agreement, there should be no "physical and emotional" barriers between communities in Ireland. However, due to Brexit, they now exist. Now, demonstrations may well turn into protest. Clearly, all this has a negative impact on the pound. It is not clear how this story will end. Ireland's top officials have already called for a meeting between the leaders of the countries involved in the conflict with the obligatory presence of London as soon as possible. So far, the parties have not agreed on arranging such a meeting. On three out of four charts, the pair closed below the important trend lines and corridors. Most likely, GBP/USD will go further down.

GBP/USD – 4H.

On the H4 chart, GBP/USD reversed and consolidated below the trend line. Thus, traders' sentiment turned bearish. The quotes may fall to the 38.2% retracement level of 1.3642. If the pair closes below this level, it may go down to the 50.0% Fibo level of 1.3457.

GBP/USD – Daily.

On the daily chart, the quotes tried to close below the ascending trend line. It was a successful attempt. As a result, the quote may fall to the 100.0% retracement level of 1.3513.

GBP/USD – Weekly.

As for the weekly chart, GBP/USD closed above the second descending trend line. In the long term, the bullis trend is likely.

News background:

On Friday, the PPI data was released in the US. It drew investors' attention. No more important news was released that day.

Economic calendar in the United States and the United Kingdom:

In the United Kingdom, the BoE's Chief Economist Andrew Haldane and External Member Silvana Tenreyro at the Bank of England will deliver their speeches.

In general, the macroeconomic calendar in the UK and the US will be empty.

Commitments of traders report (COT):

The COT report as of April 6 showed that traders are reluctant to trade the pound. Last week, traders closed 2,614 long contracts and 2,120 short contracts. Thus, their sentiment turned bullish. In general, the number of long contracts of Non-commercial traders is two times higher than shot contracts. Therefore, the bullish trend may resume.

Forecast for GBP/USD:

Traders should refrain from buying the pair because the quotes closed below the ascending corridor on the H1 chart. Traders can sell the pair after the price closes below the 100.0% retracement level of 1.3670 on the H1 chart. In such a case, the targets are seen at 1.3603 and 1.3517.

Terms:

Non-commercial traders are major market players: banks, hedge funds, investment funds, private and large investors.

Commercial traders are commercial enterprises, firms, banks, corporations, companies that buy currency not for speculative profit, but for ensuring current activities or export-import operations.

Non-reportable positions are small traders who do not have a significant impact on the price.