GBP/USD 1H
After rebounding from the support area of 1.2856 - 1.2874, the GBP/USD pair did not attempt to continue its downward movement on Tuesday, November 3. A strong upward movement began, which had a sufficient number of fundamental bases today. The price broke through the Kijun-sen and Senkou Span B lines and reached the resistance level of 1.3054. However, take note that with a 90% probability, the current movement was the result of the US elections. Consequently, today it can continue or end, but in any case it cannot be considered a normal movement, from which trends are formed. It is impossible to predict the mood and behavior of traders now. Therefore, we recommend trading with extreme caution in any case. From a purely technical point of view, breaking the 1.3054 level will open the way to the 1.3166 resistance level.
GBP/USD 15M
Both linear regression channels turned to the upside on the 15-minute timeframe, which fully corresponds to the nature of the pair's movement on the hourly chart. There are no signs of starting a downward pullback.
COT report
The latest Commitments of Traders (COT) report on the British pound showed that non-commercial traders were quite active in the period from October 20-26. However, their sentiment changed again, as can be seen from the green line of the first indicator in the chart. The mood of the "non-commercial" group of traders became more bullish for three consecutive weeks, but the net position decreased by 5,000 contracts over the last reporting week, so we can conclude that professional traders are again inclined to sell off the pound. However, if you look at the COT reports over the past few weeks or look at the first indicator, it becomes clear that commercial and non-commercial traders do not have a clear trading strategy right now. Perhaps this is due to an extremely unstable and complex fundamental background. The fact remains. The pound lost 90 points in recent trading days, and we believe that it will continue to fall. However, in the near future, we might receive important information about the progress of negotiations on the UK-EU trade deal, and the results of the vote for the US president will also become known. This information can change the mindset of professional traders. You need to be prepared for this.
No fundamental background for GBP/USD on Tuesday, at least from the UK. No new information on the progress of talks on the trade deal. No important information from overseas either. However, traders were still active all day, which caused the dollar to fall by 160 points. There can be only one reason - the US elections. Moreover, not some specific results or factors, but the very fact of elections. A few days before the elections, the US dollar rose in price, and it began to fall on the day of elections. Today, a similar nature of the pair's movement may persist, and focus will be on the US elections, which will come to an end and then the counting of votes will begin. In addition, Michelle Barnier and David Frost will have to speak and report on the results of their more than a week round of negotiations today. Recall that in recent days, we have repeatedly received information that "the parties have agreed" or at least "have made significant progress." However, yesterday a representative of the European Commission expressed doubt that the parties were able to reach an agreement on the issue of fishing quotas in British waters. Therefore, from our point of view, it is too early to consider if the deal has been signed. If there is indeed progress, then the pound may rise even more on this news.
We have two trading ideas for November 4:
1) Buyers for the pound/dollar pair managed to take a big step towards the new upward trend. Therefore, if the bulls manage to keep the pair above the Senkou Span B line (1.3028), then you are advised to trade up while aiming for the resistance level of 1.3166. Take Profit in this case will be up to 110 points. If the price leaves the area below the Senkou Span B line, then buyers will need to wait for a new signal, for example, a price rebound from the Kijun-sen line.
2) Sellers have let go of the initiative. Therefore, it is recommended to open new sell orders while aiming for the 1.2855-1.2874 area if the price settles below the Kijun-sen line (1.2965). Take Profit in the first case will be up to 80 points. We remind you that today there might be highly volatile trades and sharp price reversals again.
Hot forecast and trading signals for EUR/USD
Explanations for illustrations:
Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.
Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one.
Support and resistance areas are areas from which the price has repeatedly rebounded off.
Yellow lines are trend lines, trend channels and any other technical patterns.
Indicator 1 on the COT charts is the size of the net position of each category of traders.
Indicator 2 on the COT charts is the size of the net position for the "non-commercial" group.
