GBP/USD 5M
The GBP/USD pair was moving much more actively than the euro/dollar pair on Monday, March 29, which had been flat all day. However, it is very difficult to even imagine what could have pushed market participants to take the pair to the upside by 80 points, and then down by the same amount. However, let's look at everything in order. The pair's quotes dropped to the extremum level of 1.3755 when the European session started. It was followed by an eloquent and unambiguous rebound, which made it possible for traders to open long positions. Also, literally 15-20 minutes later, the pair settled above the critical line, which was, as it were, a confirmation of a buy signal. As a result, the pair went about 45 points to the nearest extreme level - 1.3820, above which it immediately settled. However, the bulls failed to continue pushing the pair higher, given the fact that there was no fundamental feed during the day. Thus, after hitting the horizontal channel for several hours, the bulls retreated from the market, which caused the pound/dollar pair to fall to their initial morning positions. It was very difficult to consider a signal forming around the 1.3820 level. Market participants could have been buying all this time, the pair tried to go below the 1.3820 level twice. However, the total flat for the euro/dollar pair should have alerted traders, as well as a fairly clear flat in the afternoon for the pound. In any case, even if traders opened deals on false signals, they are unlikely to have lost much, since the pair was in a flat. A clear sell signal formed at the US session, afterwards the quotes went down by about 40 points to the nearest target - the Kijun-sen line, from which a rebound also followed. Thus, traders could open a third trade (at least) - to buy. True, it certainly closed by Stop Loss at breakeven, since very soon the pair returned to the critical line again. Ultimately, the pound/dollar pair reached the 1.3755 level...
GBP/USD 1H
You can see that the pound/dollar pair managed to reach the Kijun-sen line several times on the hourly timeframe over the past day, and it also surpassed the upward trend line, while staying above the Kijun-sen and maintaining the likelihood of a new round of upward movement. In general, the pair's trend has now changed to a downward one, and in our fundamental articles we regularly talk about the fundamental groundlessness of the pound's growth over the past six months. Nevertheless, the speculative factor may continue to push this currency to the upside. At this time, much will depend on the Kijun-sen line. If the bears manage to settle below it, then the pair will have excellent chances of falling towards the 1.3677 level. But a rebound from the critical line is likely to provoke a new round of upward movement, even though the trend line is broken. Again, no important reports from America and the UK on Tuesday. In general, we continue to recommend trading from important levels and lines, when rebounding from them and surpassing them. By the way, there is also a fairly strong level like 1.3755 near the Kijun-sen line, from which the pair also rebounded off several times. As before, you should set the Stop Loss level at breakeven when the price passes 15-20 points in the right direction. The nearest level/line is always used as targets.
We also recommend that you familiarize yourself with the forecast and trading signals for the EUR/USD pair.
COT report
The GBP/USD pair fell by only 37 points during the last reporting week (March 16-22). However, this fall is as conditional as the previous week's growth. The pair travels around 37 points in an hour. Thus, it is impossible to say that the pair sharply dropped over the reporting week. But the Commitment of Traders (COT) report talks about quite serious changes. Non-commercial traders closed 3,200 buy contracts (longs) and opened 4,400 sell contracts (shorts) during the reporting week. Thus, the net position for the pound immediately decreased by 7,600, which is quite a lot and reflects that the bullish mood has significantly weakened among professional traders. Thus, despite the fact that the pound shows a not so strong fall (which is clearly seen in the chart), while the COT reports that more eloquently signal the end of the upward trend. However, an assumption should also be made here. The green and red lines of the first indicator have often changed the direction of movement over the past 6-8 months, so here it just cannot be said that the end of the upward trend has been brewing for a long time. In general, the pound's situation is more complicated and confusing than the euro's. Considering the fact that much will depend on the US economy, both the euro and the pound can resume growth.
Explanations for the chart:
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.
