FX.co ★ Forecast for GBP/USD on May 24. COT report. The Briton received further support from the statistics on Friday

GBP/USD – 1H.

According to the hourly chart, the GBP/USD pair quotes performed a new rebound from the corrective level of 200.0% (1.4216), a reversal in favor of the US dollar and a fall to the Fibo level of 161.8% (1.4136). The rebound of quotes from this level will allow us to count on a reversal in favor of the British dollar and the resumption of growth in the direction of the level of 200.0%. Closing the pair under the rising trend line, which still characterizes the mood of traders as "bullish", will work in favor of the dollar and will allow you to count on a strong drop in quotes. On Friday, there was a strong information background for the Briton. The UK also had some fairly important economic reports. Business activity indexes also rose to 66.1 points for manufacturing and 61.8 points for services.

Thus, at first, the British dollar was again in demand among traders. However, the rebound from the important level of 1.4216 and no less important statistics from America worked in favor of the fall in the pair's quotes. In Britain, retail trade data for April was released even earlier than business activity. The figures are as follows: +42.4% y/y and +9.2% m/m. Both values significantly exceeded expectations and forecasts. However, the Briton, even with strong statistics, is already very high in pair with the American in any case. On the daily chart, it is visible that the trend has been going on for a very long time, and even the point from which the trend line began to build is not its minimum point. The trend has dragged on. The British dollar enjoys the favor of traders, although its growth can not always be linked to the data that comes from the US and the UK. But if there is such a strong trend and there are no signs of its completion, then why sell the pound?

GBP/USD – 4H.

On the 4-hour chart, the GBP/USD pair performed a new reversal in favor of the US currency after the formation of a bearish divergence at the CCI indicator. Thus, the fall in quotes began in the direction of the level of 1.4003. The pair did not reach the corrective level of 0.0% (1.4240) quite a bit. Closing quotes above this level will increase the likelihood of continued growth.

GBP/USD – Daily.

On the daily chart, everything still 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 work in favor of 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 in the direction of the corrective level of 161.8% (1.4812).

GBP/USD – Weekly.

On the weekly chart, the pound/dollar pair completed a close over the second downward trend line. Thus, the chances of long-term growth of the pound remain.

Overview of fundamentals:

On Friday, the UK's economic calendar was packed with important events. In America, there were important records. As a result, the information background strongly influenced the movement of the pound/dollar pair.

News calendar for the US and the UK:

UK - parliamentary hearings on the Bank of England's monetary policy report (14:30 UTC).

UK - Bank of England Governor Andrew Bailey will deliver a speech (14:30 UTC).

On Monday, Andrew Bailey will make another speech in the UK and the Bank of England's monetary policy report will be published in parliament.

COT (Commitments of Traders) report:

The COT report of May 18 on the British dollar showed that the "bullish" mood of speculators became slightly weaker, in contrast to the report of a week ago. Thus, in general, it is noticeable that speculators continue to increase long contracts for the British. The total number of long contracts in the "Non-commercial" category of traders exceeds the number of short contracts by two times. Thus, the sentiment remains "bullish" and the latest COT reports have not shown any drastic changes in this. I will also note the extremely low activity of all categories of traders, as a total of only 6.5 thousand contracts were opened during the reporting week.

GBP/USD forecast and recommendations for traders:

It is recommended to buy the British dollar with the targets of 1.4216 and 1.4240 if there is a rebound from the trend line on the hourly chart or from the level of 161.8% (1.4136). I recommend selling the pound if a close is made under the ascending trend line on the hourly chart with targets of 1.4064 and 1.4008.

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.