GBP/USD. June 8th. The British pound struggled to maintain an upward direction
June 8, 2023 10:24 am
On the hourly chart, the GBP/USD pair rose to the corrective level of 23.6% (1.2470) on Wednesday and rebounded. At the same time, an ascending trendline was added, indicating the current sentiment of traders as “bullish.” The upward movement may continue for some time, but the bulls currently lack the strength for the British pound to keep rising. If the pair’s exchange rate remains below the trendline, it will favor the US currency and have a potential decline toward the levels of 1.2342 and 1.2295.
There is no significant background information. Despite occasional volatility, predicting the pair’s movement in the next few hours or days is challenging. The quotes frequently change direction, and the ascending trend is relatively weak. Even occasional news from the United States needs to provide more clarity to the overall picture. Therefore, traders can rely only on graphical analysis or other technical analysis.
The situation will likely stay mostly the same for the remaining two days of the week. There are no important events scheduled in the economic calendar. The market is already preparing for next week, when the Federal Reserve will announce the results of its latest meeting, and the US will release another inflation report. As for the United Kingdom, things are still going on, and the Bank of England’s meeting will take place in two weeks.
On the 4-hour chart, the pair reversed in favor of the US dollar after forming a second consecutive bearish divergence in the CCI indicator. However, a bullish divergence was later formed in the CCI indicator, allowing the resumption of the upward movement. A triangle pattern was also added to the 4-hour chart, and by breaking one of its boundaries, the direction of the pair’s movement can be determined.
Commitments of Traders (COT) report:
The sentiment of the “non-commercial” trader category has become slightly more bullish over the last reporting week. The number of long contracts held by speculators increased by 1117 units, while the number of short contracts decreased by 529. The overall sentiment of major players remains predominantly bullish (it had been bearish for a long time), but the number of long and short contracts is now almost equal – 70,000 and 57,000, respectively. The British pound has good prospects for a resumption of growth, but the current information background does not favor the dollar or the pound. The British pound has been rising for a long time, and the net position of non-commercial traders has been rising, but it all depends on whether long-term support for the British currency will be sustained. It is not worth expecting a resumption of growth at the moment.
News calendar for the US and the UK:
US – Initial Jobless Claims (12:30 UTC).
On Thursday, the economic events calendar includes only one report in the US, which is unlikely to impact the dollar’s positions significantly. The influence of the information background on traders’ sentiment in the second half of the day will be absent or very weak.
Forecast for GBP/USD and trader recommendations:
New sales of the British pound can be opened in case of a close on the hourly chart with targets at 1.2342 and 1.2295. Buying the British pound is possible on a rebound from the trendline with a target at 1.2470 or on a close above the level of 1.2470 with a target at 1.2546.
The material has been provided by InstaForex Company – www.instaforex.com
On the hourly chart, the GBP/USD pair rose to the corrective level of 23.6% (1.2470) on Wednesday and rebounded. At the same time, an ascending trendline was added, indicating the current sentiment of traders as “bullish.” The upward movement may continue for some time, but the bulls currently lack the strength for the British pound to keep rising. If the pair’s exchange rate remains below the trendline, it will favor the US currency and have a potential decline toward the levels of 1.2342 and 1.2295.
There is no significant background information. Despite occasional volatility, predicting the pair’s movement in the next few hours or days is challenging. The quotes frequently change direction, and the ascending trend is relatively weak. Even occasional news from the United States needs to provide more clarity to the overall picture. Therefore, traders can rely only on graphical analysis or other technical analysis.
The situation will likely stay mostly the same for the remaining two days of the week. There are no important events scheduled in the economic calendar. The market is already preparing for next week, when the Federal Reserve will announce the results of its latest meeting, and the US will release another inflation report. As for the United Kingdom, things are still going on, and the Bank of England’s meeting will take place in two weeks.
On the 4-hour chart, the pair reversed in favor of the US dollar after forming a second consecutive bearish divergence in the CCI indicator. However, a bullish divergence was later formed in the CCI indicator, allowing the resumption of the upward movement. A triangle pattern was also added to the 4-hour chart, and by breaking one of its boundaries, the direction of the pair’s movement can be determined.
Commitments of Traders (COT) report:
The sentiment of the “non-commercial” trader category has become slightly more bullish over the last reporting week. The number of long contracts held by speculators increased by 1117 units, while the number of short contracts decreased by 529. The overall sentiment of major players remains predominantly bullish (it had been bearish for a long time), but the number of long and short contracts is now almost equal – 70,000 and 57,000, respectively. The British pound has good prospects for a resumption of growth, but the current information background does not favor the dollar or the pound. The British pound has been rising for a long time, and the net position of non-commercial traders has been rising, but it all depends on whether long-term support for the British currency will be sustained. It is not worth expecting a resumption of growth at the moment.
News calendar for the US and the UK:
US – Initial Jobless Claims (12:30 UTC).
On Thursday, the economic events calendar includes only one report in the US, which is unlikely to impact the dollar’s positions significantly. The influence of the information background on traders’ sentiment in the second half of the day will be absent or very weak.
Forecast for GBP/USD and trader recommendations:
New sales of the British pound can be opened in case of a close on the hourly chart with targets at 1.2342 and 1.2295. Buying the British pound is possible on a rebound from the trendline with a target at 1.2470 or on a close above the level of 1.2470 with a target at 1.2546.
The material has been provided by InstaForex Company – www.instaforex.com
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