GBP/USD – 1H.
According to the hourly chart, the quotes of the GBP/USD pair closed at the level of 76.4% (1.3721) and continue the process of falling now in the direction of the level of 1.3625. The downward trend corridor keeps the current mood of traders "bearish". Closing the pair's rate above it will work in favor of the British dollar and allow traders to expect some growth in the direction of the Fibo level of 61.8% (1.3820). As for the information background, the report on inflation in the UK was the most important for the pair yesterday. The point here is not only in the report itself but in its value, which turned out to be much lower than traders' expectations. And so it is quite logical that the British dollar came under pressure and fell even more strongly against the dollar. One important detail should be noted here. All the largest and most developed countries in the world are waiting for inflation to accelerate in 2021. After the hundreds of billions and trillions of dollars that have been invested in the economy, inflation simply cannot help but rise. Especially in the UK, where vaccination of the population continues at a high rate. It is on the fears of a strong increase in inflation that the yield of treasuries, both American and British, is growing. However, as yesterday's report showed, inflation in Britain, on the contrary, is declining, which is a negative moment for the economy and the pace of its recovery. On the other hand, we were very pleased with the reports on business activity. In the service sector, the indicator rose to 56.8, in the manufacturing sector – to 57.9, and in the composite - to 56.6. However, this information did not help the British yesterday too much. Bull traders failed to close above the level of 1.3721, so at the moment there is a high probability of further decline.
GBP/USD – 4H.
On the 4-hour chart, the GBP/USD pair performed a consolidation under the corrective level of 127.2% (1.3701). Thus, the process of falling can now be continued in the direction of the next Fibo level of 100.0% (1.3481). There are no emerging divergences in any indicator today.
GBP/USD – Daily.
On the daily chart, the pair's quotes closed under the ascending trend line. Thus, in the long term, the "bullish" mood of traders has changed to "bearish". This is an important point for the prospects of the British currency.
GBP/USD – Weekly.
On the weekly chart, the pound/dollar pair completed a close over the second downward trend line. Thus, the chances of long-term growth of the pound are significantly increased.
Overview of fundamentals:
There was plenty to look out for in the UK and the US on Wednesday. But despite the abundance of reports, the pair's movement during the day was weak. Thus, traders again ignored most of the reports of the day.
News calendar for the United States and the United Kingdom:
UK - Bank of England Governor Andrew Bailey will deliver a speech (07:00 GMT).
UK - Bank of England Governor Andrew Bailey will deliver a speech (09:30 GMT).
US - change in GDP for the quarter (12:30 GMT).
US - number of initial and repeated applications for unemployment benefits (12:30 GMT).
On Thursday, two speeches by Andrew Bailey are scheduled in the UK, and in America - a relatively important report on GDP and a less significant one on applications for unemployment benefits.
COT (Commitments of Traders) report:
The latest COT report of March 16 on the British pound was just as discouraging as on the euro. The "Non-commercial" category of traders behaved much more modestly and closed only 6.2 thousand long contracts. But the category of "Commercial" traders got rid of 23 thousand long contracts and 27 thousand short contracts. Thus, in total, the British lost approximately 30-33 thousand contracts of both types. Such a sharp drop in activity, by the way, did not affect the chart of the pair in any way. I can only conclude that the "bullish" mood of traders has weakened even more recently. However, the number of purchases in the hands of speculators is still twice as large as the number of sales.
GBP / USD forecast and recommendations for traders:
I recommend buying the British dollar today if the quotes are fixed above the descending corridor on the hourly chart with the targets of 1.3820 and 1.3900. Selling the pound yesterday was recommended at the close at 1.3701 with targets of 1.3625 and 1.3560. Now, these transactions can be kept open.
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.
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