GBP/USD. April 28th. The US GDP report did not lead to a dollar decline
April 28, 2023 1:23 pm
On the hourly chart, the GBP/USD pair on Thursday rebounded from the corrective level of 100.0% (1.2447) and experienced a slight growth. Today: a new decline to 1.2447 and the probability of a new rebound, which will again allow us to expect a slight increase. Closing below 1.2447 will favor the US currency and the continuation of the decline toward the level of 1.2342. However, I do not expect strong movements today, as bulls and bears have been pulling the blanket toward themselves all week and still have not figured out who is stronger. There was no news background in the UK this week, and the key report in the US was yesterday’s preliminary GDP estimate for the first quarter. The US economy grew by just 1.1% in the first quarter, undoubtedly disappointing economists. However, the bulls, having received an excellent opportunity to start new growth, should have taken advantage of it.
The week will end with two of the most important reports on changes in personal income and expenses in the US, the Personal Consumption Expenditures Index and the Consumer Sentiment Index from the University of Michigan. I do not expect a strong reaction from traders to these reports. Most likely, everything will end for the pound this week with a horizontal movement. Next week there will be a Fed meeting, which has a high chance of moving the pair from a dead point, and a week later, there will be a Bank of England meeting. The Federal Reserve will raise the interest rate by 0.25% (this can be said with confidence already), and the Bank of England can make almost any decision on QE. Thus, the meeting of the British regulator will be of decisive importance for the pound sterling. There is no doubt that the market has already considered the Fed’s rate change by 0.25%, as these plans have been known for a long time.
On the 4-hour chart, the pair consolidated below the ascending trend corridor. Exiting the corridor is an important graphical signal, indicating a change in sentiment to “bearish.” The “bullish” divergence allowed for some growth, but in recent weeks the pair’s movement can be characterized as “horizontal.” The level of 1.2441 is now weak, but each closing below it may mean the beginning of the pair’s decline toward the corrective level of 127.2% (1.2250).
Commitments of Traders (COT) report:
The sentiment of the “non-commercial” category of traders has become more “bullish” over the last reporting week. The number of long contracts held by speculators decreased by 1094 units, while the number of short contracts decreased by 4794. The overall sentiment of major players has changed to “bullish,” but the number of long and short contracts is now almost the same – 54,000 and 52,000, respectively. The market sentiment for the pound has been “bearish” for a long time, but bulls have been strengthening their positions, and the pound has been actively growing. At this time, graphical analysis indicates a possible decline, but it may be short-lived. Thus, the prospects for the pound remain good, but soon, its decline can be expected.
News calendar for the US and UK:
US – Core Personal Consumption Expenditures (PCE) Price Index (12:30 UTC).
US – Consumer Sentiment Index from the University of Michigan (14:00 UTC).
On Friday, the economic events calendar contains only two entries in the US. These entries are far less important than yesterday’s GDP report. The impact of the news background on traders’ sentiment today will be weak or absent.
GBP/USD forecast and advice for traders:
I advise selling the pound with targets at 1.2380 and 1.2342 in case of consolidation below the 1.2441-1.2447 zone. Pound purchases are possible upon a rebound from the 1.2447 level, with targets at 1.2500 and 1.2546.
The material has been provided by InstaForex Company – www.instaforex.com
On the hourly chart, the GBP/USD pair on Thursday rebounded from the corrective level of 100.0% (1.2447) and experienced a slight growth. Today: a new decline to 1.2447 and the probability of a new rebound, which will again allow us to expect a slight increase. Closing below 1.2447 will favor the US currency and the continuation of the decline toward the level of 1.2342. However, I do not expect strong movements today, as bulls and bears have been pulling the blanket toward themselves all week and still have not figured out who is stronger. There was no news background in the UK this week, and the key report in the US was yesterday’s preliminary GDP estimate for the first quarter. The US economy grew by just 1.1% in the first quarter, undoubtedly disappointing economists. However, the bulls, having received an excellent opportunity to start new growth, should have taken advantage of it.
The week will end with two of the most important reports on changes in personal income and expenses in the US, the Personal Consumption Expenditures Index and the Consumer Sentiment Index from the University of Michigan. I do not expect a strong reaction from traders to these reports. Most likely, everything will end for the pound this week with a horizontal movement. Next week there will be a Fed meeting, which has a high chance of moving the pair from a dead point, and a week later, there will be a Bank of England meeting. The Federal Reserve will raise the interest rate by 0.25% (this can be said with confidence already), and the Bank of England can make almost any decision on QE. Thus, the meeting of the British regulator will be of decisive importance for the pound sterling. There is no doubt that the market has already considered the Fed’s rate change by 0.25%, as these plans have been known for a long time.
On the 4-hour chart, the pair consolidated below the ascending trend corridor. Exiting the corridor is an important graphical signal, indicating a change in sentiment to “bearish.” The “bullish” divergence allowed for some growth, but in recent weeks the pair’s movement can be characterized as “horizontal.” The level of 1.2441 is now weak, but each closing below it may mean the beginning of the pair’s decline toward the corrective level of 127.2% (1.2250).
Commitments of Traders (COT) report:
The sentiment of the “non-commercial” category of traders has become more “bullish” over the last reporting week. The number of long contracts held by speculators decreased by 1094 units, while the number of short contracts decreased by 4794. The overall sentiment of major players has changed to “bullish,” but the number of long and short contracts is now almost the same – 54,000 and 52,000, respectively. The market sentiment for the pound has been “bearish” for a long time, but bulls have been strengthening their positions, and the pound has been actively growing. At this time, graphical analysis indicates a possible decline, but it may be short-lived. Thus, the prospects for the pound remain good, but soon, its decline can be expected.
News calendar for the US and UK:
US – Core Personal Consumption Expenditures (PCE) Price Index (12:30 UTC).
US – Consumer Sentiment Index from the University of Michigan (14:00 UTC).
On Friday, the economic events calendar contains only two entries in the US. These entries are far less important than yesterday’s GDP report. The impact of the news background on traders’ sentiment today will be weak or absent.
GBP/USD forecast and advice for traders:
I advise selling the pound with targets at 1.2380 and 1.2342 in case of consolidation below the 1.2441-1.2447 zone. Pound purchases are possible upon a rebound from the 1.2447 level, with targets at 1.2500 and 1.2546.
The material has been provided by InstaForex Company – www.instaforex.com
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