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Forecast for GBP/USD on May 10


According to the hourly chart, the GBP/USD pair on Monday performed a rebound from the level of 1.2272 and a reversal in favor of the British. Thus, the growth process can be continued in the direction of the corrective level of 423.6% (1.2432). However, neither yesterday nor today, bull traders are in no hurry to buy the pair, so the conclusion may be the same as for the euro/dollar pair. The Briton has fallen very much in recent months. But how can it show growth if no one buys it? In many ways, the prospects for the Briton depend on the outcome and duration of the Ukrainian-Russian conflict. Let me remind you that it was in the last 2.5 months that the Briton and the European showed almost a record drop, so the conclusion why this happened is obvious. It can be assumed that as long as the conflict persists, the euro and the pound will remain under pressure from traders. And the conflict does not even think of ending.

Kyiv and Moscow have officially frozen any negotiations, and Ukraine's demands are growing stronger and stronger every day. It is hardly possible to talk about any impudence of the Ukrainian side, which is fighting on its territory. However, if at the beginning of the military operation, Kyiv's demand at the peace talks was to withdraw Russian troops to positions before February 24, now Kyiv does not agree to anything other than the complete de-occupation of the entire Ukrainian territory, including Crimea and the entire Donbas. Moscow does not agree with this position, but, for example, Washington believes that the Kremlin's military operation has already failed, since only a few local goals have been achieved. America and the European Union continue to supply weapons to Ukraine. Yesterday, Joe Biden signed the Lend-Lease law, which further simplifies military supplies. Thus, it simply makes no sense for Ukraine to retreat in the military sense of the word, it makes no sense to make concessions to Russia in negotiations. Therefore, the entire conflict may drag on for many months and turn into positional battles in the near future.


On the 4-hour chart, the pair performed a drop almost to the corrective level of 127.2% (1.2250), but there was no rebound from it. Nevertheless, the pair performed a reversal in favor of the British and began the process of growth in the direction of the corrective level of 100.0% (1.2674). This reversal was preceded by the formation of a bullish divergence in the MACD indicator. Fixing the pair's rate below the level of 127.2% will increase the probability of a new fall in the pound towards the level of 1.1980.

Commitments of Traders (COT) Report:


The mood of the "Non-commercial" category of traders has changed a lot again over the past week. The number of long contracts in the hands of speculators decreased by 6,900 units, and the number of short - by 2,708. Thus, the general mood of the major players has become even more "bearish". The ratio between the number of long and short contracts for speculators still corresponds to the real picture on the market - longs are 3 times more than shorts (107,349-33,536). The big players continue to get rid of the pound. Thus, I expect that the pound may continue its decline over the coming weeks. But also such a strong gap between the number of longs and shorts may indicate an imminent change of trend in the market. I do not rule out that the British will end its long fall this week.

News calendar for the USA and the UK:

On Tuesday, the calendars of economic events in the UK and the US are empty. Thus, there will be no influence of the information background on the mood of traders today.

GBP/USD forecast and recommendations to traders:

I recommend new sales of the British with a target of 1.2272 when rebounding from the level of 1.2432 on the hourly chart. Or with a target of 1.2146 when closing below the level of 1.2272. I recommended buying the British when rebounding from the level of 1.2272 with a target of 1.2432. Now, these deals can be kept open.

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