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. I also built a new downward trend line for the pound/dollar pair, which allows you to count on a further fall and defines the current mood of most traders as "bearish". There was not much news on Friday. Most of them were again related to the coronavirus epidemic. For example, the United Kingdom, represented by acting Prime Minister Dominic Raab, said that now it does not know how to continue doing business with China, hinting that it is Beijing that is responsible for the spread of infection and deaths of British citizens, not to mention a serious decline in the economy. It is also reported that the scale of the epidemic in Britain is only increasing and there is no decline in the number of patients. In contrast to Spain and Italy, where there are at least some signs of receding infection.
GBP/USD – 4H.
As seen on the 4-hour chart, the pound/dollar pair performed a reversal in favor of the US currency and anchored under the corrective level of 61.8% (1.2516). Thus, the chances of continuing the decline are increasing, but over the past few days, the US dollar has not been able to continue its growth. And the 4-hour chart clearly shows a low-activity movement along with the corrective level of 61.8%. That is, now it is also possible to move the pair inside a narrow side corridor. This is also indicated by the MACD indicator, which is located near the zero levels, warning about the lack of advantage for bulls or bears at this time. There are no pending divergences in any indicator today either.
GBP/USD – Daily.
On the daily chart, the pair's quotes performed a reversal in favor of the US currency and returned to the corrective level of 50.0% (1.2463). Fixing quotes below this level will work in favor of continuing to fall 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 break of the lower trend line. Thus, before the pair's quotes are fixed under this line, there is a high probability of growth in the direction of the two upper trend lines, but in the long term.
Overview of fundamentals:
There were no economic reports in the UK or America on Friday. Among the main news of the day, I can only mention negative forecasts about the consequences for the world economy from the IMF and many rating agencies, investment banks, and so on. Everyone agrees that the crisis caused by the coronavirus epidemic will be one of the most severe in the last century.
The economic calendar for the US and the UK:
On April 20, news from the UK is not expected again. Also, no news or reports are expected from America. Thus, the information background will not be available today.
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 consider selling 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 British currency with the target of 1.2777 (and, consequently, closing all sales) if the pair makes a consolidation above the level of 1.2516 and 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.