GBP/USD – 1H.
According to the hourly chart, the GBP/USD pair quotes performed two rebounds yesterday from the corrective level of 38.2% (1.3879) and a rebound from the Fibo level of 23.6% (1.3928). A day earlier, it remained between these levels at the end of the day. The last rebound from the level of 38.2% allows traders to count on growth in the direction of 1.3928. But in general, this picture is called flat or sideways. Yesterday, the activity of traders was very high, clearly provoked by the Bank of England, its meeting, and its results. But nothing has changed dramatically for the pound/dollar pair. At this time, the exchange rate is where it was a day earlier. Thus, the Bank of England meeting caused only an unnecessary storm in the market, and no important decisions and statements were made. The only thing that can be noted is a decrease in weekly asset purchases by 1 billion pounds. Whether this is good or bad, you can judge for yourself. However, if this decision were unambiguous, then the reaction of traders would be unambiguous. The same goes for raising GDP forecasts for 2021. Yesterday they were introduced to 7.25%, but this is just a forecast. If the epidemiological situation worsens in the UK tomorrow, this forecast can also be easily lowered. Traders did not react to the increase in the forecast for economic growth. Thus, in general, they were not impressed by the results of the meeting. Andrew Bailey's Deputy Ben Broadbent and Bank of England Monetary Committee member Andy Haldane will speak today. They may have something new to tell traders, especially since Governor Andrew Bailey did not speak yesterday. However, more attention will be paid to reports on Nonfarm Payrolls in the US and the unemployment rate.
GBP/USD – 4H.
On the 4-hour chart, the GBP/USD pair also closed above the corrective level of 23.6% (1.3870) after forming a bullish divergence at the CCI indicator, which allows traders to count on continued growth in the direction of the level of 1.4003. Still, in general, the graphical picture does not look very accurate. The most clear picture looks on the daily and hourly charts, which I recommend paying more attention to now.
GBP/USD – Daily.
On the daily chart, everything 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 favor the US currency and the beginning of the fall of quotations in the direction of the corrective level of 100.0% (1.3513).
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 Thursday, the UK also released the PMI index for the services sector, which was slightly better than traders' expectations. But it did not have much impact on traders.
News calendar for the United States and the United Kingdom:
UK - PMI index for the construction sector (08:30 UTC).
UK - Bank of England Deputy Governor for Monetary Policy Ben Broadbent will deliver a speech (11:15 UTC).
UK - Bank of England MPC member Andy Haldane will deliver a speech (11:15 UTC).
US - unemployment rate (12:30 UTC).
US - change in the number of people employed in the non-agricultural sector (12:30 GMT).
On Friday, the information background will be very strong. Here are the speeches of representatives of the Bank of England and the most important reports in the United States.
COT (Commitments of Traders) report:
The latest COT report from April 27 on the British dollar showed that the mood of speculators again became a little more "bullish." Although this time, it was about closing contracts, not opening them. The number of long contracts was reduced by 1,168, and the number of short contracts - by 5,008. Thus, the gap between the total number of long and short contracts in the category of "Non-commercial" traders has increased. It increases the likelihood of new growth in the British dollar. However, the upward trend line on the daily chart is now of key importance for its prospects.
GBP/USD forecast and recommendations for traders:
The situation now remains confusing, and yesterday's movements are proof of that. I recommend buying the British dollar with a target of 1.4084 if there is a rebound from the trend line on the daily chart. I recommend selling the pound if a close is made under the 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.
