FX.co ★ Forecast for GBP/USD on May 27. COT report. Dominic Cummings acknowledged the mistakes of the British government in the fight against COVID.

GBP/USD – 1H.

According to the hourly chart, the quotes of the GBP/USD pair performed a new reversal in favor of the US currency and a recent close under the Fibo level of 161.8% (1.4136). However, in general, all the movement of the last days is much more similar to the movement in the side corridor. At the same time, the lower limit of this corridor is somewhere near the level of 1.4100. That is, in the near future, the pair may perform a reversal in favor of the British dollar and resume growth in the direction of the corrective level of 200.0% (1.4216). Meanwhile, in the UK, the former chief adviser to Boris Johnson, Dominic Cummings, made several high-profile statements that cast a shadow on the prime minister and the country's entire government. Cummings said that the blame for the failed fight against the coronavirus lies entirely with the government, which at the right time did not have the right skills and competence. The government was not ready to take decisive action and delayed taking measures to counteract the pandemic for too long. Cummings also said that Boris Johnson refused to recognize the real danger of COVID until the very last moment and that he heard the Prime Minister talking about "mountains of corpses instead of a new lockdown" at the end of April. Cummings also said that the formation of collective immunity was the government's main strategy from the very beginning. At 10 Downing Street, they were prepared because a large part of the country's population would get sick, and a certain number of citizens would die from complications caused by COVID. Cummings also does not absolve himself of responsibility, as he should have warned the Prime Minister much earlier and insisted on introducing quarantine in 2020 at the beginning of March.

GBP/USD – 4H.

On the 4-hour chart, the GBP/USD pair performed a reversal in favor of the US currency after forming a bearish divergence at the CCI indicator. At the moment, the process of falling in the direction of the level of 1.4003 is very weak. The hourly chart shows that the pair is moving in a sideways corridor.

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 quotes under this line will work in favor of the US dollar and start falling in the direction of the corrective level of 100.0% (1.3513). The growth process will continue at the corrective level of 161.8% (1.4812) until this happens.

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 Wednesday, there were no significant events in the UK or America that could attract traders' attention.

News calendar for the United States and the United Kingdom:

US - number of initial applications for unemployment benefits (12:30 UTC).

US - change in GDP for the quarter (12:30 UTC).

US - change in the volume of orders for long-term goods (12:30 UTC).

On Thursday in the UK, the calendar of economic events will remain as empty as Monday and Tuesday. In the US, several potentially essential reports will be released. The information background will be present today.

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:

I recommend buying the British dollar if the pair performs a rebound from the trend line on the daily chart, with a target of 1.4216. I recommend selling the pound sterling if a close is made under the ascending trend line on the daily chart with a target of 1.3513.

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.