FX.co ★ Forecast for GBP/USD on April 11. UK: economic growth is slowing down

According to the hourly chart, the GBP/USD pair performed a 40-point drop on Monday, but very quickly recovered all losses and continues to balance just above the 1.2980 level, from which the rebound was performed on Friday. Thus, traders can even count on some growth in the direction of the corrective level of 200.0% (1.3071). However, fixing the pair below the level of 1.2980 will increase the probability of continuing the fall in the direction of the next corrective level of 261.8% (1.2895). Reports on GDP and industrial production were released in the UK this morning. And I must say, they disappointed bull traders once again. GDP growth rates in February amounted to 0.1% m/m and 1.0% q/q. This is less than traders expected and lower than a month earlier. Industrial production in February decreased by 0.6% with a forecast of +0.3% m/m. Thus, there are still few reasons for the joy and purchases of the Briton. This week, inflation reports will be released in Britain and the United States, which are much more important in the current conditions than industrial production or GDP.

Let me remind you that the actions of the Bank of England and the Fed in the coming year will be aimed at suppressing inflation, which is already approaching double digits. However, not everything will depend on the actions of regulators. Oil and gas prices, which are imported both in Britain and in the EU, will be of great importance. The state of the economies of the EU and Britain will also depend on the state of the economies of their trading partners. All this is like a big snowball. It begins to roll down the hill with a small snowball but grows by the minute. Thus, if the European economy falls into recession, then the British economy may fall into it, as it is too dependent on trade operations with the European Union. In general, we are waiting for inflation indicators, according to which it will be possible to understand what actions the Bank of England and the Fed will decide on in May.

On the 4-hour chart, the pair secured under the corrective level of 76.4% (1.3044). Thus, the process of falling quotations can be continued in the direction of the next level of 1.2860. The descending trend line characterizes the mood of traders as "bearish". Closing the pair's rate above the trend line will change it for some to "bullish", and the British dollar may rise to the Fibo level of 61.8% (1.3274). There are no brewing divergences today.

Commitments of Traders (COT) Report:

The mood of the "Non-commercial" category of traders has not changed much over the last reporting week. The number of long contracts in the hands of speculators increased by 5,249, and the number of short - by 6,937. Thus, the general mood of the major players has become even more "bearish". The ratio between the number of long and short contracts for speculators corresponds to the real state of things on the market - longs are 2 times more than shorts. The British dollar is falling, and major players are more likely to sell the pound than buy it. Thus, I expect the pound to continue its decline. This forecast is based on geopolitics, based on COT reports, and based on graphical analysis.

News calendar for the USA and the UK:

UK - change in GDP (06:00 UTC).

UK - change in industrial production (06:00 UTC).

US - FOMC member Michelle Bowman will deliver a speech (13:30 UTC).

US - FOMC member Rafael Bostic will deliver a speech (13:30 UTC).

US - FOMC member Charles Evans will deliver a speech (16:40 UTC).

On Monday, the calendars of economic events in the UK and the US contain interesting entries. But in Britain, all the reports have already been released, we can only wait for the performances of Bowman, Bostic, and Evans. The influence of the information background on the mood of traders today may be average in strength.

GBP/USD forecast and recommendations to traders:

I now recommend selling the British dollar with targets of 1.2980 and 1.2895, as the consolidation was performed below the level of 1.3044 on the 4-hour chart. I recommend buying the British when closing above the trend line on the 4-hour chart with targets of 1.3181 and 1.3274.