GBP/USD – 1H.
On the hourly chart, GBP/USD rose to the correction level of 23.6% - 1.3928, rebounded from it, made a reversal in favor of the US dollar and started a new decline towards the Fibo level of 50.0% - 1.3839. Currently, GBP is trading under pressure although yesterday it showed impressive growth. In general, however, the pound's trajectory has been very chaotic in recent months. This is especially obvious on the 4-hour and 24-hour charts. This week, several important events will take place for the British pound. All of them are scheduled for May 6. On this day, the Bank of England will complete its meeting and announce the results. Additionally, parliamentary elections will be held in Scotland. This event will show whether Nicola Sturgeon's SNP party will get more than 50% of the votes to form a majority and make decisions independently of other political parties.
If so, then the question of a referendum on Scottish independence will become even more acute. There are a lot of pitfalls and issues that cause different response among voters. First, the votes "for" and "against" the independence of Scotland are distributed almost equally now. However, there is no guarantee that the SNP will win the election with the necessary number of votes. Secondly, the Scottish National Party has been a leading party for a long time. So, obviously the Scottish people have a lot to complain about, although this party remains the most powerful so far. Finally, many people doubt that the SNP and Nicola Sturgeon will cope with independence after Scotland separates from the UK. It is better to wait for the election results and then analyze possible scenarios.
GBP/USD - 4H.
On the 4-hour chart, the GBP/USD pair reversed in favor of the British pound and closed above the 23.6% retracement level of 1.3870. Thus, if a rebound follows from this level in the next few hours, traders can count on further growth towards the level of 1.4003. If the price closes below the 23.6% level, the pair is likely to continue its fall towards the Fibo level of 38.2% - 1.3642.
GBP/USD - Daily.
On the daily chart, the pair has returned to the ascending trendline. At the moment, it may either pull back or close below it. In the first case, the uptrend will continue, in the second one, the chances for an extended fall will increase. For now, the daily chart displays the most accurate picture on the pair.
GBP/USD - Weekly.
On the weekly chart, the pound/dollar pair closed above the second descending trendline. Thus, the pound still has the chance for a long-term uptrend.
On Monday, the economic calendar in the UK was empty. Only one report was released in the US which put some pressure on the US dollar.
Economic calendar in US and UK:
On Tuesday, the economic calendars in the UK and US are completely empty, so the information background is unlikely to have any impact on traders.
COT (Commitments of traders) report:
The latest COT report from April 27 showed that traders' sentiment has become a bit more bullish again. Although this time it was about closing contracts, not opening them. The number of long contracts reduced by 1,168, and the number of short contracts was down by 5,008. Thus, the gap between the total number of long and short contracts for the non-commercial category of traders has increased. This makes a new rise in the British pound more likely. However, the ascending trendline on the daily chart is of key importance for the British currency now.
GBP/USD forecast and trading tips:
The situation on the pair is a bit confusing now. I recommend buying the pound with the target at 1.4084 if the price rebounds from the trendline on the daily chart. I recommend selling the pound sterling if the price closes below the trendline on the daily chart with the target at 1.3513.
Non-commercial group of traders includes major market players such as banks, hedge funds, investment funds, private and large investors.
Commercial group of traders includes commercial enterprises, firms, banks, corporations, and companies that buy currency not to obtain speculative profit but to ensure current activities or export-import operations.
Non-reportable positions refer to small traders who do not have a significant impact on the price.