GBP/USD. April 8th. Nonfarm Payrolls did not help the dollar
April 8, 2024 11:22 am
On the hourly chart, the GBP/USD pair rebounded from the support zone of 1.2584–1.2611 on Friday and turned in favor of the British pound. There wasn’t enough time for a new rise in the pair, but bullish traders still retain the possibility of pushing the pound up this week. If the quotes consolidate below the zone of 1.2584–1.2611, it will benefit the US currency and resume the decline toward the levels of 1.2517 and 1.2453. The trend on the hourly chart remains “bearish.”
The wave situation has been clear recently. The last completed downward wave easily broke the previous low (from March 19), while the new upward wave is still too weak to break the previous peak (from March 21). Thus, the trend for the GBP/USD pair is “bearish,” and there are no signs of its completion. The first sign of bulls transitioning to the offensive could be a breakthrough of the peak on March 21. However, bulls need to cover a distance of about 180 pips to reach the zone of 1.2788–1.2801, which is unlikely to happen in the coming days. If the new downward wave does not break the low from April 1, it will also be a sign of a trend change to “bullish,” but this wave hasn’t even started yet.
There were many important news releases on Friday. In the UK, the morning saw the release of the Construction Purchasing Managers’ Index, which turned out to be slightly better than expected. However, this report is not considered important, so traders preferred to wait for the American data. Nonfarm payrolls turned out to be significantly stronger than market expectations, with the unemployment rate falling to 3.8% and wage growth reaching 0.3%. If the third report matched forecasts, the first two were significantly better. Thus, the bears immediately went on the offensive, but they didn’t have enough strength to break the zone of 1.2584–1.2611. Last week, bears were generally very weak because American statistics repeatedly gave them opportunities to attack. Now, the advantage is already in the hands of the bulls, and the zone of 1.2584–1.2611 will support their ambitions.
On the 4-hour chart, the pair turned in favor of the British pound after the formation of a “bullish” divergence on the RSI indicator and consolidation above the level of 1.2620. Thus, the growth process may continue towards the next Fibonacci retracement level of 61.8%–1.2745. There are no new emerging divergences observed with any indicators today. The “bearish” trend persists on the hourly chart, but on the 4-hour chart, horizontal movement continues.
Commitments of Traders (COT) report:
The sentiment in the “non-commercial” trader category became slightly more “bullish” over the past reporting week. The number of long contracts in speculators’ hands increased by 7091 units, while the number of short contracts decreased by 1153 units. The overall sentiment of large players remains “bullish,” but it has started to weaken in recent weeks. The gap between the number of long and short contracts is now less than double: 98 thousand versus 55 thousand.
In my opinion, the prospects for a decline remain for the British pound, but over the past 3 months, the number of long contracts has increased from 61 thousand to 98 thousand, while the number of short contracts has practically not changed. I believe that over time, bulls will start to get rid of buy positions, as all possible factors for buying the British pound have already been worked out. However, bears continue to demonstrate their weakness almost every week, which prevents the pound from starting to decline.
News Calendar for the US and UK:
On Monday, the economic events calendar did not contain any important entries. The influence of the news background on market sentiment will be absent today.
Forecast for GBP/USD and trading advice:
Sales of the British pound can be opened upon consolidation below the zone of 1.2584–1.2611, with targets at 1.2517 and 1.2453. Purchases were possible upon closing above the zone of 1.2584–1.2611 on the hourly chart with a target of 1.2705. These trades can now be kept open, as there was a rebound from the zone of 1.2584–1.2611.
The material has been provided by InstaForex Company – www.instaforex.com
On the hourly chart, the GBP/USD pair rebounded from the support zone of 1.2584–1.2611 on Friday and turned in favor of the British pound. There wasn’t enough time for a new rise in the pair, but bullish traders still retain the possibility of pushing the pound up this week. If the quotes consolidate below the zone of 1.2584–1.2611, it will benefit the US currency and resume the decline toward the levels of 1.2517 and 1.2453. The trend on the hourly chart remains “bearish.”
The wave situation has been clear recently. The last completed downward wave easily broke the previous low (from March 19), while the new upward wave is still too weak to break the previous peak (from March 21). Thus, the trend for the GBP/USD pair is “bearish,” and there are no signs of its completion. The first sign of bulls transitioning to the offensive could be a breakthrough of the peak on March 21. However, bulls need to cover a distance of about 180 pips to reach the zone of 1.2788–1.2801, which is unlikely to happen in the coming days. If the new downward wave does not break the low from April 1, it will also be a sign of a trend change to “bullish,” but this wave hasn’t even started yet.
There were many important news releases on Friday. In the UK, the morning saw the release of the Construction Purchasing Managers’ Index, which turned out to be slightly better than expected. However, this report is not considered important, so traders preferred to wait for the American data. Nonfarm payrolls turned out to be significantly stronger than market expectations, with the unemployment rate falling to 3.8% and wage growth reaching 0.3%. If the third report matched forecasts, the first two were significantly better. Thus, the bears immediately went on the offensive, but they didn’t have enough strength to break the zone of 1.2584–1.2611. Last week, bears were generally very weak because American statistics repeatedly gave them opportunities to attack. Now, the advantage is already in the hands of the bulls, and the zone of 1.2584–1.2611 will support their ambitions.
On the 4-hour chart, the pair turned in favor of the British pound after the formation of a “bullish” divergence on the RSI indicator and consolidation above the level of 1.2620. Thus, the growth process may continue towards the next Fibonacci retracement level of 61.8%–1.2745. There are no new emerging divergences observed with any indicators today. The “bearish” trend persists on the hourly chart, but on the 4-hour chart, horizontal movement continues.
Commitments of Traders (COT) report:
The sentiment in the “non-commercial” trader category became slightly more “bullish” over the past reporting week. The number of long contracts in speculators’ hands increased by 7091 units, while the number of short contracts decreased by 1153 units. The overall sentiment of large players remains “bullish,” but it has started to weaken in recent weeks. The gap between the number of long and short contracts is now less than double: 98 thousand versus 55 thousand.
In my opinion, the prospects for a decline remain for the British pound, but over the past 3 months, the number of long contracts has increased from 61 thousand to 98 thousand, while the number of short contracts has practically not changed. I believe that over time, bulls will start to get rid of buy positions, as all possible factors for buying the British pound have already been worked out. However, bears continue to demonstrate their weakness almost every week, which prevents the pound from starting to decline.
News Calendar for the US and UK:
On Monday, the economic events calendar did not contain any important entries. The influence of the news background on market sentiment will be absent today.
Forecast for GBP/USD and trading advice:
Sales of the British pound can be opened upon consolidation below the zone of 1.2584–1.2611, with targets at 1.2517 and 1.2453. Purchases were possible upon closing above the zone of 1.2584–1.2611 on the hourly chart with a target of 1.2705. These trades can now be kept open, as there was a rebound from the zone of 1.2584–1.2611.
The material has been provided by InstaForex Company – www.instaforex.com
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