GBP/USD. April 18th. British statistics were surprised by its weakness.
April 18, 2023 4:25 pm
On the hourly chart, the GBP/USD pair fell almost to 1.2342 on Monday but then reversed in favor of the British pound and today worked out the Fibonacci level of 100.0% (1.2447). A rebound of quotes from this level will favor the US dollar and a new decline towards 1.2342. Closing the pair’s rate above 1.2447 will increase the likelihood of continued growth toward the next corrective level of 1.2546.
There was interesting news for the British pound today. Three reports were released in Great Britain early in the morning, which could have affected the traders’ mood. However, it is difficult to conclude whether they ultimately had an impact on it. The first and most important report is on unemployment. The indicator rose to 3.8%, corresponding to traders’ expectations, but the report did not become positive. The same goes for the second most important report of the day – changes in the number of unemployment benefits claims. Their number increased by 28.2 thousand in March, with a forecast of -9.2 thousand. Wages are the only report that can be considered positive for the pound, as they showed growth of 5.9% with expectations of +5.1%. Thus, two reports were disappointed, and one was pleased. And traders paid no attention to the first two reports, or immediately to all three, as the pound began to rise overnight and was in this process all day. British statistics did not interest traders, as is often the case. If so, the pair is moving based solely on graphical analysis. If this is also true, the decline should resume from 1.2447 since we saw an upward correction after a two-day decline. This means that the main movement, which is downward after fixing the pair’s quotes under the rising trend corridor, should resume. Traders’ mood should have changed to “bearish.”
On the 4-hour chart, the pair reversed in favor of the US dollar and consolidated under the rising trend corridor and the level of 1.2441. I believe the exit from the corridor is a very important graphical signal, indicating a change in mood to “bearish.” The “bullish” divergence allowed a return to 1.2441, but a rebound from it again will work in favor of the American currency and the resumption of the decline. The simultaneous exit from two rising corridors says a lot.
Commitments of Traders (COT) report:
The sentiment of the “Non-commercial” trader category has changed significantly over the past reporting week. The number of long contracts held by speculators increased by 8513 units, and the number of short contracts increased by 3882. The overall mood of major players remains “bearish,” The number of short contracts still exceeds the number of long contracts, although only slightly. Ironically, at this time, the market sentiment may change to “bearish” as there are quite specific signals to sell. Over the past few months, the situation has constantly changed in favor of the pound, but nothing is forever. Thus, the prospects for the pound remain good, but in the near future, one should expect its decline.
The economic calendar for the US and UK:
UK – Unemployment Rate (06:00 UTC).
UK – Changes in the number of unemployment benefit claims (06:00 UTC).
UK – Average earnings change (06:00 UTC).
On Tuesday, the economic events calendars contain several important entries, but they have already become available to traders, and no reactions have followed. The influence of the information background on traders’ sentiment in the remaining part of the day will be absent.
Forecast for GBP/USD and trading recommendations:
I advise selling the pound with targets of 1.2342 and 1.2295 in case of a rebound from 1.2441-1.2447. Buying the pound will be possible after closing above the level of 1.2447 on the hourly chart with a target of 1.2546.
The material has been provided by InstaForex Company – www.instaforex.com
On the hourly chart, the GBP/USD pair fell almost to 1.2342 on Monday but then reversed in favor of the British pound and today worked out the Fibonacci level of 100.0% (1.2447). A rebound of quotes from this level will favor the US dollar and a new decline towards 1.2342. Closing the pair’s rate above 1.2447 will increase the likelihood of continued growth toward the next corrective level of 1.2546.
There was interesting news for the British pound today. Three reports were released in Great Britain early in the morning, which could have affected the traders’ mood. However, it is difficult to conclude whether they ultimately had an impact on it. The first and most important report is on unemployment. The indicator rose to 3.8%, corresponding to traders’ expectations, but the report did not become positive. The same goes for the second most important report of the day – changes in the number of unemployment benefits claims. Their number increased by 28.2 thousand in March, with a forecast of -9.2 thousand. Wages are the only report that can be considered positive for the pound, as they showed growth of 5.9% with expectations of +5.1%. Thus, two reports were disappointed, and one was pleased. And traders paid no attention to the first two reports, or immediately to all three, as the pound began to rise overnight and was in this process all day. British statistics did not interest traders, as is often the case. If so, the pair is moving based solely on graphical analysis. If this is also true, the decline should resume from 1.2447 since we saw an upward correction after a two-day decline. This means that the main movement, which is downward after fixing the pair’s quotes under the rising trend corridor, should resume. Traders’ mood should have changed to “bearish.”
On the 4-hour chart, the pair reversed in favor of the US dollar and consolidated under the rising trend corridor and the level of 1.2441. I believe the exit from the corridor is a very important graphical signal, indicating a change in mood to “bearish.” The “bullish” divergence allowed a return to 1.2441, but a rebound from it again will work in favor of the American currency and the resumption of the decline. The simultaneous exit from two rising corridors says a lot.
Commitments of Traders (COT) report:
The sentiment of the “Non-commercial” trader category has changed significantly over the past reporting week. The number of long contracts held by speculators increased by 8513 units, and the number of short contracts increased by 3882. The overall mood of major players remains “bearish,” The number of short contracts still exceeds the number of long contracts, although only slightly. Ironically, at this time, the market sentiment may change to “bearish” as there are quite specific signals to sell. Over the past few months, the situation has constantly changed in favor of the pound, but nothing is forever. Thus, the prospects for the pound remain good, but in the near future, one should expect its decline.
The economic calendar for the US and UK:
UK – Unemployment Rate (06:00 UTC).
UK – Changes in the number of unemployment benefit claims (06:00 UTC).
UK – Average earnings change (06:00 UTC).
On Tuesday, the economic events calendars contain several important entries, but they have already become available to traders, and no reactions have followed. The influence of the information background on traders’ sentiment in the remaining part of the day will be absent.
Forecast for GBP/USD and trading recommendations:
I advise selling the pound with targets of 1.2342 and 1.2295 in case of a rebound from 1.2441-1.2447. Buying the pound will be possible after closing above the level of 1.2447 on the hourly chart with a target of 1.2546.
The material has been provided by InstaForex Company – www.instaforex.com
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