GBP/USD – 1H.
According to the hourly chart, the quotes of the GBP/USD pair performed two rebounds from the corrective level of 61.8% (1.3820) and intend to perform the third one. Thus, in the coming hours, a reversal in favor of the British currency may also be made and new growth in the direction of the corrective level of 50.0% (1.3900) may begin. Closing the pair's exchange rate below the Fibo level of 61.8% will increase the probability of a further fall towards the next corrective level of 76.4% (1.3721). As I have said in recent articles, vaccination continues at a high rate in the UK, and this allows Boris Johnson and Andrew Bailey to look positively to the future. However, there are expectations and forecasts, and there are specific economic statistics that show how these expectations and forecasts come true.
Already today, in just half an hour, important reports on the unemployment rate and average wages will be released in the UK. It is expected that the number of applications for unemployment benefits will decrease by 140-160 thousand, and the unemployment rate will remain 5.1% or rise to 5.2%. Average wages may increase by 4.3-4.8%. Andrew Bailey is also due to give a speech today, which will be expected to answer the same questions as Jerome Powell or Janet Yellen. Let me remind you that many traders and investors are now worried about a future surge in inflation, which simply cannot be avoided, given the hundreds of billions of dollars in aid to the American and British economies. Economists believe that a very impressive deferred demand has accumulated now, and as soon as it starts to be realized, inflation will immediately burst upward. Hence the sharp rise in government bond yields in Britain and the EU and expectations of any action from central banks.
GBP/USD – 4H.
On the 4-hour chart, the GBP/USD pair, after rebounding from the level of 161.8% (1.3979) and the formation of a bearish divergence at the CCI indicator, performed a reversal in favor of the US currency and began the process of falling. It seems that the pair is currently trading inside a sideways corridor with a lower border near the level of 1.3820. Thus, it is the closing below the level of 1.3820 that will allow traders to count on the continuation of the fall in the direction of the level of 127.2% (1.3701).
GBP/USD – Daily.
On the daily chart, the pair's quotes continue to be above the ascending trend line. In the long term, the "bullish" mood of traders is still preserved. The rebound of quotes from the trend line will allow us to expect a reversal in favor of the British dollar and a resumption of growth.
GBP/USD – Weekly.
On the weekly chart, the pound/dollar pair performed a close over the second downward trend line. Thus, the chances of long-term growth of the pound are significantly increased.
Overview of fundamentals:
There were no major news or events in the UK or America on Monday. The information background was zero on this day.
News calendar for the United States and the United Kingdom:
UK - change in the number of applications for unemployment benefits (07:00 GMT).
UK - unemployment rate (07:00 GMT).
UK - change in the level of average earnings (07:00 GMT).
UK - Bank of England Governor Andrew Bailey will deliver a speech (11:50 GMT).
US - Federal Reserve Board of Governors Chairman Jerome Powell will deliver a speech (16:00 GMT).
US - Treasury Secretary Janet Yellen will deliver a speech (16:00 GMT).
On Tuesday, the calendars of economic events in the United States and Britain are bursting with important information. Today, the activity of traders can be very high.
COT (Commitments of Traders) report:
The latest COT report of March 16 on the British pound was just as discouraging as on the euro. The "Non-commercial" category of traders behaved much more modestly and closed only 6.2 thousand long contracts. But the category of "Commercial" traders got rid of 23 thousand long contracts and 27 thousand short contracts. Thus, in total, the British lost approximately 30-33 thousand contracts of both types. Such a sharp drop in activity, by the way, did not affect the chart of the pair in any way. I can only conclude that the "bullish" mood of traders has weakened even more recently. However, the number of purchases in the hands of speculators is still twice as large as the number of sales.
GBP/USD forecast and recommendations for traders:
I recommend buying the British dollar today in case of a rebound of quotes from the level of 1.3820 on the hourly chart with a target of 1.3900. It is recommended to sell the pound at the close under 1.3820 with a target of 1.3721 on the same 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 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.
