On the hourly chart, the GBP/USD pair bounced off the support zone of 1.2690–1.2705 on Friday and turned in favor of the British pound, resuming growth towards the resistance zone of 1.2788–1.2801. A rebound of quotes from this zone will favor the US dollar and a slight fall towards the 1.2690–1.2705 zone. Consolidating below 1.2690–1.2705 will increase the likelihood of further decline towards the 1.2611 level. The bulls maintain absolute dominance in the market.
The wave situation remains unchanged. The last downward wave ended on May 9 without breaking the low of the previous wave, while the new upward wave broke the peak from May 3. Thus, the trend for the GBP/USD pair has changed to “bullish” and remains so. However, this bullish trend might be short-lived, as the current informational background does not seem strong enough for the British pound to support several more upward waves. Nonetheless, the first sign of the end of the bullish trend will appear only when a new downward wave manages to break the low of the previous wave from May 9. The pound must fall 320-340 points from the current price for this.
The British pound continues to rise almost without interruptions. During periods when the bulls rest, there are no movements at all. On Friday, a retail sales report in the UK showed a much worse value than the market expected. In the afternoon, reports from the US showed values above expectations. Despite this, the bears could not break the 1.2690–1.2705 zone to start forming at least a corrective wave. Therefore, the bulls hold complete dominance, regardless of the economic data entering the market. Based on the graphical picture, I believe that the current trader sentiment is so bullish that only further growth can be expected. Strong support for the bulls lies in the 1.2690–1.2705 zone.
On the 4-hour chart, the pair returned to the corrective level of 1.2745. A rebound of quotes from the 1.2745 level will allow another slight fall towards the 1.2620 level. Consolidating above the 1.2745 level will give more confidence to the bullish traders, who may continue to attack to reach the 1.3044 level. No impending divergences were observed in any indicators today. On the hourly chart, the pair’s fall is held back by the 1.2690–1.2705 zone.
Commitments of Traders (COT) Report:
The sentiment of the “Non-commercial” category of traders became less bearish over the last reporting week. The number of long contracts held by speculators increased by 19,864 units, while the number of shorts decreased by 1,264. The overall sentiment of large players has changed again, and now neither bulls nor bears hold the advantage. The gap between the long and short contracts is just one thousand: 68 thousand versus 67 thousand.
The British pound still has the prospect of a decline. Over the past 3 months, the number of Longs has decreased from 83 thousand to 68 thousand, while the number of Shorts has increased from 49 thousand to 67 thousand. Over time, bulls will continue to reduce Buy positions or increase Sell positions, as all possible factors for buying the British pound have already been worked out. Bears have shown their weakness and complete reluctance to go on the offensive in recent months, making it difficult for the pair to move downwards.
News Calendar for the US and the UK:
The economic event calendar contains no interesting entries on Monday. The impact of the informational background on market sentiment will be absent for the rest of the day.
Forecast for GBP/USD and Trading Tips:
Selling the British pound is possible if there is a rebound from the resistance zone on the hourly chart at 1.2788–1.2801, targeting 1.2690–1.2705. It is also possible to sell upon closing below the 1.2690–1.2705 zone, targeting 1.2611. Purchases could have been opened on Friday upon a rebound from the 1.2690–1.2705 zone, targeting 1.2788–1.2801. These trades can currently be kept open.
The material has been provided by InstaForex Company – www.instaforex.com
On the hourly chart, the GBP/USD pair bounced off the support zone of 1.2690–1.2705 on Friday and turned in favor of the British pound, resuming growth towards the resistance zone of 1.2788–1.2801. A rebound of quotes from this zone will favor the US dollar and a slight fall towards the 1.2690–1.2705 zone. Consolidating below 1.2690–1.2705 will increase the likelihood of further decline towards the 1.2611 level. The bulls maintain absolute dominance in the market.
The wave situation remains unchanged. The last downward wave ended on May 9 without breaking the low of the previous wave, while the new upward wave broke the peak from May 3. Thus, the trend for the GBP/USD pair has changed to “bullish” and remains so. However, this bullish trend might be short-lived, as the current informational background does not seem strong enough for the British pound to support several more upward waves. Nonetheless, the first sign of the end of the bullish trend will appear only when a new downward wave manages to break the low of the previous wave from May 9. The pound must fall 320-340 points from the current price for this.
The British pound continues to rise almost without interruptions. During periods when the bulls rest, there are no movements at all. On Friday, a retail sales report in the UK showed a much worse value than the market expected. In the afternoon, reports from the US showed values above expectations. Despite this, the bears could not break the 1.2690–1.2705 zone to start forming at least a corrective wave. Therefore, the bulls hold complete dominance, regardless of the economic data entering the market. Based on the graphical picture, I believe that the current trader sentiment is so bullish that only further growth can be expected. Strong support for the bulls lies in the 1.2690–1.2705 zone.
On the 4-hour chart, the pair returned to the corrective level of 1.2745. A rebound of quotes from the 1.2745 level will allow another slight fall towards the 1.2620 level. Consolidating above the 1.2745 level will give more confidence to the bullish traders, who may continue to attack to reach the 1.3044 level. No impending divergences were observed in any indicators today. On the hourly chart, the pair’s fall is held back by the 1.2690–1.2705 zone.
Commitments of Traders (COT) Report:
The sentiment of the “Non-commercial” category of traders became less bearish over the last reporting week. The number of long contracts held by speculators increased by 19,864 units, while the number of shorts decreased by 1,264. The overall sentiment of large players has changed again, and now neither bulls nor bears hold the advantage. The gap between the long and short contracts is just one thousand: 68 thousand versus 67 thousand.
The British pound still has the prospect of a decline. Over the past 3 months, the number of Longs has decreased from 83 thousand to 68 thousand, while the number of Shorts has increased from 49 thousand to 67 thousand. Over time, bulls will continue to reduce Buy positions or increase Sell positions, as all possible factors for buying the British pound have already been worked out. Bears have shown their weakness and complete reluctance to go on the offensive in recent months, making it difficult for the pair to move downwards.
News Calendar for the US and the UK:
The economic event calendar contains no interesting entries on Monday. The impact of the informational background on market sentiment will be absent for the rest of the day.
Forecast for GBP/USD and Trading Tips:
Selling the British pound is possible if there is a rebound from the resistance zone on the hourly chart at 1.2788–1.2801, targeting 1.2690–1.2705. It is also possible to sell upon closing below the 1.2690–1.2705 zone, targeting 1.2611. Purchases could have been opened on Friday upon a rebound from the 1.2690–1.2705 zone, targeting 1.2788–1.2801. These trades can currently be kept open.
The material has been provided by InstaForex Company – www.instaforex.com
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