GBP/USD. April 24. The British currency can’t break through the 1.2450 level
April 24, 2023 10:22 am
On the hourly chart, on Friday, the GBP/USD pair completed growth to the corrective level of 100.0% (1.2447), a rebound from it, and a reversal in favor of the US currency. Thus, a new decline process began towards the 1.2342 level, which is unlikely to be reached. Horizontal movement is now observed in the British currency, and the quote decline is most likely to end around the 1.2380–1.2400 area. Fixing the pair’s rate above 100.0% will favor the British currency and continue its growth towards 1.2546.
Business activity indices and retail sales were released on Friday in the UK. Retail trade volumes fell more than traders expected, and business activity indices left a contradictory aftertaste. The British currency reacted to this data with a decline in the day’s first half but recovered in the second half. The information background on this scale is now virtually not affecting traders’ sentiment, and today and tomorrow, there won’t even be such reports. Thus, horizontal movement can persist for some time, with very few important reports this week.
There is no new information from the Federal Reserve or the Bank of England. Last week, some members of the FOMC stated that the inflation target in the US remains at 2% and that significant progress in reducing it has yet to be achieved. Therefore, traders are confident that the FOMC rate will increase by another 0.25% at the next meeting, but demand for the US currency is not growing. There is no new information from the Bank of England, although the market is confident its rate will increase by 0.25% in May. The British and US currencies are currently in a state of equilibrium.
On the 4-hour chart, the pair completed a reversal in favor of the US dollar and consolidation below the ascending trend corridor and the 1.2441 level. I believe the exit from the corridor is a very important graphic signal, indicating a change in sentiment to “bearish.” The “bullish” divergence allowed for a return to the 1.2441 level, but a rebound from it will again work in favor of the US currency and the resumption of the decline towards the Fibonacci 127.2% level (1.2250). Closing the pair above 1.2441 will give confidence to the bulls.
Commitments of Traders (COT) Report:
The sentiment of the “non-commercial” trader category over the past reporting week has changed to “bullish.” The number of long contracts in the hands of speculators decreased by 1,094 units, while the number of short contracts decreased by 4,794. The overall sentiment of large players changed to “bullish,” but the number of long and short contracts is now almost equal: 54,000 and 52,000, respectively. The sentiment in the market for the British currency has long remained “bearish,” but all this time, bulls have been strengthening their positions, and the British currency actively grew. The graphical analysis indicates a possible decline, but it may be short-lived. Thus, the prospects for the pound remain favorable, but in the near future, its decline can be expected.
News calendar for the US and UK:
On Monday, the economic events calendar contained a few interesting entries. The influence of the information background on traders’ sentiment today will be absent.
GBP/USD forecast and advice for traders:
I advise selling the British currency with targets at 1.2380 and 1.2342 in case of a rebound from the 1.2441–1.2447 levels. Purchases of the British currency will be possible upon closing above the 1.2447 level 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, on Friday, the GBP/USD pair completed growth to the corrective level of 100.0% (1.2447), a rebound from it, and a reversal in favor of the US currency. Thus, a new decline process began towards the 1.2342 level, which is unlikely to be reached. Horizontal movement is now observed in the British currency, and the quote decline is most likely to end around the 1.2380–1.2400 area. Fixing the pair’s rate above 100.0% will favor the British currency and continue its growth towards 1.2546.
Business activity indices and retail sales were released on Friday in the UK. Retail trade volumes fell more than traders expected, and business activity indices left a contradictory aftertaste. The British currency reacted to this data with a decline in the day’s first half but recovered in the second half. The information background on this scale is now virtually not affecting traders’ sentiment, and today and tomorrow, there won’t even be such reports. Thus, horizontal movement can persist for some time, with very few important reports this week.
There is no new information from the Federal Reserve or the Bank of England. Last week, some members of the FOMC stated that the inflation target in the US remains at 2% and that significant progress in reducing it has yet to be achieved. Therefore, traders are confident that the FOMC rate will increase by another 0.25% at the next meeting, but demand for the US currency is not growing. There is no new information from the Bank of England, although the market is confident its rate will increase by 0.25% in May. The British and US currencies are currently in a state of equilibrium.
On the 4-hour chart, the pair completed a reversal in favor of the US dollar and consolidation below the ascending trend corridor and the 1.2441 level. I believe the exit from the corridor is a very important graphic signal, indicating a change in sentiment to “bearish.” The “bullish” divergence allowed for a return to the 1.2441 level, but a rebound from it will again work in favor of the US currency and the resumption of the decline towards the Fibonacci 127.2% level (1.2250). Closing the pair above 1.2441 will give confidence to the bulls.
Commitments of Traders (COT) Report:
The sentiment of the “non-commercial” trader category over the past reporting week has changed to “bullish.” The number of long contracts in the hands of speculators decreased by 1,094 units, while the number of short contracts decreased by 4,794. The overall sentiment of large players changed to “bullish,” but the number of long and short contracts is now almost equal: 54,000 and 52,000, respectively. The sentiment in the market for the British currency has long remained “bearish,” but all this time, bulls have been strengthening their positions, and the British currency actively grew. The graphical analysis indicates a possible decline, but it may be short-lived. Thus, the prospects for the pound remain favorable, but in the near future, its decline can be expected.
News calendar for the US and UK:
On Monday, the economic events calendar contained a few interesting entries. The influence of the information background on traders’ sentiment today will be absent.
GBP/USD forecast and advice for traders:
I advise selling the British currency with targets at 1.2380 and 1.2342 in case of a rebound from the 1.2441–1.2447 levels. Purchases of the British currency will be possible upon closing above the 1.2447 level 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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