Technical analysis of GBP/USD for April 27,2021. COT Report

GBP/USD – 1H.

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Hello, dear traders! On the H1 chart, GBP/USD fell twice to the 50.0% retracement level of 1.3839 and bounced twice from this level. Then the price went up to the 23.6% Fibo level of 1.3928, reversed, and dropped to the 38.2% retracement level of 1.3879. If the price closes below 1.3879, the bearish trend will extend. Otherwise, if the price reverses, it may rise to 1.3928. Meanwhile, British Prime Minister Boris Johnson is now facing a backlash due to the introduction of a lockdown this winter. According to BBC, Johnson was against a lockdown last autumn and said he would rather see "bodies pile high" than take the country into a third lockdown. His quote became viral as several TV channels and tabloids spread the news. ITV journalist Robert Preston claimed that two sources in the government heard how Johnson said the phrase. The news stirred resentment in the government. Labour leader Sir Keir Starmer said he and his family were "astonished". Several political observers confirmed that Boris Johnson was very concerned about the state of the economy and could opposed a new lockdown last autumn. Meanwhile, the prime minister denied saying the phrase. The question is: "Why did all this come out now if Johnson made the remark in autumn and many PMs heard the phrase?"

GBP/USD – 4H.

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On the H4 chart, GBP/USD went below the 23.6% retracement level of 1.3870. The bullish divergence of CCI made a reversal possible and the price went up to 1.4003. In case of a pullback from the retracement level, the price may reverse and the downward trend may resume.

GBP/USD – Daily.

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On the daily chart, the quotes went up to the 127.2% retracement level of 1.4084. If the price closes below the ascending trend line, GBP/USD may drop sharply.

GBP/USD – Weekly.

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On the weekly chart, GBP/USD closed above the second descending trend line. The pair has a strong chance of rising in the long term.

News background:

On Monday, the UK's macroeconomic calendar was empty, while the US delivered only one report that was ignored by traders.

Macroeconomic calendar of the United States and the United Kingdom:

On Tuesday, no important reports are set for release both in the US and the UK.

Commitments of traders report (COT):

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According to the COT report as of April 20, Non-commercial traders opened 10,523 long contracts and 8,205 short contracts for the reporting week. Notably, large market players were more active. Overall, the number of long and short contracts opened for the reporting week was 15,171 and 20,600 respectively. Speculative sentiment turned bullish. The ratio of long to short contracts remains approximately 2:1. This means that the pound may extend its rally.

Forecast for GBP/USD:

Traders should consider entering long positions with the target set at 1.4084 in case of a rebound from the trend line on the daily chart. One may enter short positions with the target at 1.3513 if the price closes below the trend line on the daily chart.

Terms:

Non-commercial traders are major market players: banks, hedge funds, investment funds, private and large investors.

Commercial traders are commercial enterprises, firms, banks, corporations, companies that buy currency not for speculative profit, but for ensuring current activities or export-import operations.

Non-reportable positions are small traders who do not have a significant impact on the price.

The material has been provided by InstaForex Company - www.instaforex.com

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