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GBP / USD. May 4th. COT report. The X hour for the UK is approaching.

GBP/USD – 1H.

Good afternoon, dear traders! On the hourly chart, the GBP / USD pair rose to the correction level of 23.6% – 1.3928, rebound from it, reversal in favor of the American currency and began a new process of falling towards the Fibo level of 50.0% – 1.3839. Thus, the Briton is currently under pressure from traders, although yesterday it showed a very impressive growth. However, in general, in recent months, the Briton has been trading very chaotic, without a clear trend. This can be seen very clearly in the 4-hour and 24-hour charts. Several very important events will take place for the British pound this week. Moreover, they are all scheduled for the date of May 6th. It is on this day that the Bank of England will end its meeting and announce its results. It is on this day that parliamentary elections will begin in Scotland, which are designed to answer a very important question: will Nikola Sturgeon’s SNP party get more than 50% of the vote to form a majority government and make decisions independently of other political parties? If so, then the question of a referendum on Scottish independence will become even more acute. And there are a lot of “pitfalls” and moments in which the electorate does not have a clear opinion. First, the votes “for” and “against” the independence of Scotland are even now distributed approximately equally, which absolutely does not guarantee the SNP victory with the necessary advantage. Secondly, the Scottish National Party has been ruling the country for a long time and a list of complaints has accumulated against the inhabitants of Scotland, although this party remains the most powerful. Third, many are not convinced that in the event of separation from the UK, the SNP and Nicola Sturgeon will cope with this independence. But to begin with, it is better to wait for the election results, and only then analyze possible options for further developments.

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GBP/USD – 4H.

On the 4-hour chart, the GBP / USD pair also reversed in favor of the British and closed above the 23.6% retracement level of 1.3870. Thus, if a rebound follows from this level in the next few hours, then traders will have the opportunity to count on a new growth towards the level of 1.4003. Closing quotations below the 23.6% level will increase the likelihood of a continuation of the fall in the direction of the Fibo level of 38.2% – 1.3642.

GBP/USD – Daily.

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On the daily chart, the quotes of the pair completed a return to the uptrend line and at this time it is being decided what will happen: a pullback or a close below. In the first case, the uptrend will continue, in the second, the chances for the continuation of the fall in quotations will increase. The daily chart now most accurately describes the picture of what is happening.

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GBP/USD – Weekly.

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On the weekly chart, the pound-dollar pair closed above the second downtrend line. Thus, the chances of a long-term growth of the pound sterling remain.

News overview:

On Monday, the calendar of economic events in the UK was empty, and in the US, only one report was released, which put a little pressure on the American’s position.

News calendar for USA and UK:

On Tuesday, the UK and US calendars are completely empty, so the information background is unlikely to have an impact on traders.

Report COT(Commitments of traders):

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The latest COT report from April 27 UK showed that speculators’ sentiment has become a bit more bullish again. Although this time it was about closing contracts, not opening them. The number of Long contracts was reduced by 1168, and the number of Short contracts – by 5008. Thus, the gap between the total number of Long and Short contracts for the “Non-commercial” trader category has increased. This increases the likelihood of a new rise in the British quotes. However, the uptrend line on the daily chart is of key importance for its prospects now.

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Forecast for GBP / USD and recommendations for traders:

The situation is now confusing. I recommend buying the British with a target of 1.4084 if the trend line is rebounded on the daily chart. I recommend selling the pound sterling if it closes below the trendline on the daily chart with a target of 1.3513.

TERMS:

“Non-commercial” – large market players: banks, hedge funds, investment funds, private, large investors.

“Commercial” – commercial enterprises, firms, banks, corporations, companies that buy currency not to obtain 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.

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