GBP/USD – 1H.
According to the hourly chart, the GBP/USD pair quotes consolidated above the corrective level of 61.8% (1.3929) on Friday and began a new strong growth, which does not stop at the moment. Since the consolidation above the Fibo level of 100.0% (1.4008) was already made today, the quotes can continue to move further up in the direction of the next corrective level of 127.2% (1.4064), and even further – to 161.8% (1.4136). As the reasons for such a strong fall in the US currency, we can only name the report on Nonfarm Payrolls in the US and the unemployment rate. The statistic on Friday was disappointing. However, in the UK, there is something to worry about at the moment. Separatist parties quite predictably won last Friday's parliamentary elections in Scotland, particularly the Scottish National Party led by Nicola Sturgeon, who is currently the country's First Minister. The SNP failed to win an absolute majority, but at least two other parties support the idea of secession from London. The SNP won 64 seats out of 129 seats in Parliament. Thus, it needs only one third-party vote to be able to make almost any decisions and bills. Nicola Sturgeon's party will most likely organize a coalition with the Green Party, which won 8 seats. These election results in Scotland mean that Nicola Sturgeon will continue to push for a new independence referendum to break away from England. Only the SNP's electoral defeat could stop this idea. But this has not happened, so in the next few years, Scotland may hold a second independence referendum in the last decade.
GBP/USD – 4H.
On the 4-hour chart, the GBP/USD pair closed above the level of 1.4003, which allows us to count on continued growth in the direction of the next corrective level of 0.0% (1.4240). There are no emerging divergences in any indicator.
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 quotes in the direction of the corrective level of 100.0% (1.3513). Until this happens, the growth process will continue with the Fibo level of 127.2% (1.4084). The next target is the corrective level of 161.8% (1.4812).
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 Friday, several representatives of the Bank of England made speeches in the UK. The business activity index for the construction sector was released, the value of which was slightly worse than forecasts. However, all this did not matter, as traders reacted exclusively to the weak data on Nonfarm and unemployment in the United States.
News calendar for the United States and the United Kingdom:
On Monday, the information background will be absent in both the UK and the US. Nevertheless, since the morning, there has been a continuation of Friday's growth of the pound/dollar pair.
COT (Commitments of Traders) report:
The latest COT report from May 4 on the British dollar showed that speculators' "bullish" mood has become much weaker. And this is although the British dollar continues to grow, which is best seen on the daily chart. However, the "Non-commercial" category of traders closed 7,628 long contracts and opened almost 2,000 short contracts during the reporting period. Thus, the mood of speculators has become much more "bearish." However, based on the movement of the Briton, we can conclude that this is a simple accident. The trend cannot be maintained upward if the most important category of traders does not buy the pair.
GBP/USD forecast and recommendations for traders:
It was recommended to buy the British dollar with a target of 1.4084 if there is a rebound from the trend line on the daily chart. At this time, this position should be kept open. 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.
