GBP/USD – 1H.
Hello, traders! According to the hourly chart, the pound/dollar pair performed a reversal in favor of the US currency and resumed falling. The new downward trend line continues to define the mood of most traders as "bearish". Thus, although the drop in quotes is not strong, it is still there, and there is no reason to buy now according to the hourly chart. These grounds will appear if the pound/dollar pair performs a consolidation above the trend line. In this case, traders will be able to consider buying options for the pound. On Monday, April 21, all the news related to the oil market. May futures fell in price to negative values. Although the euro/dollar pair is not very interested in the oil market, nevertheless, I see such a collapse in oil prices as bad bells for the currency market. The main reason for the fall in oil prices is the extremely low demand for it. This means that industrial production is now at a standstill, and the tourism and transport industries (the main consumers of fuel) are also not moving. Thus, we can see firsthand the crisis caused by the COVID-19 epidemic.
GBP/USD – 4H.
On the 4-hour chart, the pound/dollar pair performed a reversal in favor of the US currency, anchoring under the corrective level of 61.8% (1.2516) and continues the process of falling in the direction of the corrective level of 50.0% (1.2303). No indicator shows any signs of a reversal in favor of the British pound on April 21. Thus, on the 4-hour chart, only the rebound of quotes from the Fibo level of 50.0% will allow traders to expect a reversal in favor of the English currency and the beginning of growth in quotes. Also, I recommend that you wait for the quotes to close above the trend line on the hourly chart to make purchase transactions.
GBP/USD – Daily.
On the daily chart, the pair's quotes performed a reversal in favor of the US currency and anchored under the corrective level of 50.0% (1.2463). Thus, the pair can continue the process of falling quotes in the direction of the next corrective level of 38.2% (1.2215).
GBP/USD – Weekly.
On the weekly chart, the pound/dollar pair performed a false breakdown of the lower trend line. Thus, until the pair's quotes are fixed under this line, there is a high probability of growth in the direction of the top two trend lines, but in the long term.
Overview of fundamentals:
There were no economic reports in the UK or America on Monday. There was no background information.
News calendar for the US and UK:
United Kingdom - change in the number of applications for unemployment benefits (08:00 GMT).
United Kingdom - unemployment rate (08:00 GMT).
United Kingdom - change in average earnings (08:00 GMT).
On April 21, several reports will be released in the UK that may interest traders. However, I believe that the reaction will be extremely weak, if at all. However, today it will be possible to find out how the quarantine will affect unemployment rates in Britain.
COT (Commitments of Traders) report:
The new COT report is higher on Friday and showed minimal growth in interest among major market players in the British currency. However, this growth is so minimal that it does not even make sense to talk about it. The total increase was only about 3,000 contracts for both groups - short and long. Thus, I believe that the pound remains an extremely unattractive currency for large banks and companies pursuing various goals. For example, speculators have now concentrated in their hands the minimum number of contracts for a long time - only about 80,000. And the total number of contracts is now about 320,000. For comparison, the total number of euro contracts is more than a million. There were no major changes during the reporting week. For all categories of traders, changes are minimal - plus or minus 2-3 thousand. The minimum advantage remains on the side of the bulls, as the total number of long contracts exceeds short by 7,000.
Forecast for GBP/USD and recommendations to traders:
I believe that today we should sell the pound with a target of 1.2303 since the closing was performed under the corrective level of 61.8% on the 4-hour chart. I recommend buying the pound with the goal of 1.2777 (and, consequently, closing all sales) if the pair performs a rebound from the level of 1.2303 and closes above the trend line on the hourly chart.
Terms:
"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.
"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy currency, not for speculative profit, but to ensure current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.
