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FX.co ★ Forecast for GBP/USD on May 6. COT report. The Bank of England meeting and the Scottish election.

Forecast for GBP/USD on May 6. COT report. The Bank of England meeting and the Scottish election.

GBP/USD – 1H.

Forecast for GBP/USD on May 6. COT report. The Bank of England meeting and the Scottish election.

According to the hourly chart, the GBP/USD pair quotes rebounded from the corrective level of 38.2% (1.3879) and remained between the levels of 23.6% and 38.2%. Thus, trading during yesterday was held in a narrow range, which indicates a low activity of traders. Fixing the pair's rate above the level of 23.6% (1.3928) will increase the probability of continuing the growth of quotes in the direction of the next level of 0.0% (1.4007). Closing the quotes below the level of 38.2% will allow you to count on a reversal in favor of the American and a slight drop in the direction of the levels of 1.3839 and 1.3798. Today is a very important day for the British pound. Today, representatives of the monetary committee of the Bank of England will present the results of the meeting. Traders do not expect any changes in monetary policy. However, surprises are always possible. Thus, the most interesting information can be found in a document called the Bank of England's Summary of Monetary Policy. Also, today, parliamentary elections will begin in Scotland. Their results will be known at least tomorrow and even the day after tomorrow. Therefore, during today's day, traders are unlikely to trade based on the still unknown vote results. However, this is also a very important topic for the whole of the UK and the British pound. Today, there are still good chances that the British dollar will be traded quite actively.

GBP/USD – 4H.

Forecast for GBP/USD on May 6. COT report. The Bank of England meeting and the Scottish election.

On the 4-hour chart, the GBP/USD pair also performed a reversal in favor of the British dollar. They closed above the corrective level of 23.6% (1.3870) after forming a bullish divergence at the CCI indicator. Thus, the growth process can be continued in the direction of the level of 1.4003, but in general, the graphical picture does not look very accurate. The most clear picture looks on the daily chart, where I recommend you to pay attention.

GBP/USD – Daily.

Forecast for GBP/USD on May 6. COT report. The Bank of England meeting and the Scottish election.

On the daily chart, the pair's quotes returned to the ascending trend line, and at this time, it is decided what will happen: a rebound or a close below. In the first case, the upward trend will continue. In the second - the chances of continuing to fall in quotes will increase. The daily chart now most accurately describes the picture of what is happening.

GBP/USD – Weekly.

Forecast for GBP/USD on May 6. COT report. The Bank of England meeting and the Scottish election.

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:

There were no major economic reports in the UK on Wednesday. And the reports from the US did not have much impact on traders.

News calendar for the United States and the United Kingdom:

UK - PMI index for the service sector (08:30 UTC).

UK - decision on the main interest rate of the Bank of England (11:00 UTC).

UK - planned volume of asset purchases by the Bank of England (11:00 UTC).

UK - summary of monetary policy (11:00 UTC).

US - number of initial applications for unemployment benefits (12:30 UTC).

On Thursday, the most interesting event of the day will take place in Britain, but even this does not guarantee important information and the reaction of traders to it.

COT (Commitments of Traders) report:

Forecast for GBP/USD on May 6. COT report. The Bank of England meeting and the Scottish election.

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 is confusing right now. 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.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade
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