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18.05.202108:54 Forex Analysis & Reviews: Hot forecast for GBP/USD on May 18, 2021

The coronavirus is once again becoming the main topic of the day. This time, the news is exclusively in a positive context. The UK has recorded the lowest number of cases of coronavirus infection in the past fourteen months. Even before such a significant event, talk did not subside that the vaccination program was yielding results, and the epidemiological situation was clearly declining, so that quarantine and restrictive measures could be completely canceled very soon. Now, there is no doubt about this at all. At the moment, it is only about whether the restrictive measures will be lifted by the end of the month, or whether it will happen in June. In any case, the pound has clearly perked up on this news.

Exchange Rates 18.05.2021 analysis

Such great news will clearly overshadow everything else, and investors will probably not pay attention to the data on the labor market, which should show an increase in the unemployment rate from 4.9% to 5.0%. Moreover, there have long been many questions about the data provided by the United Kingdom regarding the labor market. In general, the situation does not look the best. However, the prospect that the UK will be the first of the major countries to completely remove restrictive measures will allow us to put aside all sorts of unpleasant questions—at least for a while. But this may be quite enough for the pound to significantly strengthen its position. In addition, the increase in the unemployment rate in the UK is now hardly surprising. On the contrary, it will be perceived as something normal. This is something of an afterthought and keeping up with Europe and the United States. So, even if such wonderful news had not come from London, the pound would hardly have noticed the increase in the unemployment rate at all.

Unemployment rate (UK):

Exchange Rates 18.05.2021 analysis

The GBP/USD currency pair continues to pursue an upward cycle, which ultimately leads to a full recovery relative to the corrective move 1.4224 ---> 1.3668. Market dynamics is slightly below average, but speculative interest is visible to the naked eye, following from a number of technical indicators.

Based on the current location of the quote, it is worth highlighting the upward interest during the Asian session, on the basis of which the local maximum of May 11 - 1.4165 was broken.

Looking at the trading chart in general terms, the daily period can be seen as a medium-term upward trend, which is still relevant among traders.

In this situation, it is worth paying special attention to the local maximum of the medium-term trend of 1.4224 from February 24, the area of which stands in the way of buyers. The logical basis associated with the 1.4180 / 1.4224 area may well reduce the volume of long positions, but it should be kept in mind that speculative interest, as before, takes place in the market, therefore, keeping the price higher than 1.4224 may lead to unjustified expectations and another burst of long positions along an upward trajectory.

From the point of view of a comprehensive indicator analysis, it can be seen that technical instruments unanimously signal a buy, due to the price movement at the high of the medium-term trend.

Exchange Rates 18.05.2021 analysis

*Prezentowana analiza rynku ma charakter informacyjny i nie jest przewodnikiem po transakcji.

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