GBP/USD 5M
The GBP/USD pair traded more actively than the EUR/USD pair on Wednesday, April 14. On the other hand, the volatility of the pound/dollar pair was as much as 60 points, which is approximately equal to 30 points of volatility for the euro/dollar pair. And so yesterday was also a rather boring day for the pound. The only difference is that several signals were generated for the pound, which could be worked out and one can make a profit. As usual, nothing interesting happened in the Asian session. But in any case, we do not recommend opening positions earlier than the European session. With the opening of European session, a buy signal was immediately formed when the pair surpassed the extremum level of 1.3773. This signal should have been worked out by opening long positions with the Senkou Span B line (1.3811) as the target. Unfortunately, the price fell short of reaching this line by only 3 points and the only way to make a profit on this deal was to close it manually. However, it was not possible to close it by Take Profit. Therefore, some traders could get out of it in zero profit (they should have set Stop Loss to breakeven after passing 20 points in the right direction), some - to get a small profit. The next signal was formed when the pair returned to the 1.3773 level. This time the bears managed to settle below this level, but failed to settle below the critical line (1.3754). Thus, the most that traders could earn on a short trade is 12-13 points. This was followed by a fairly clear rebound from the Kijun-sen line, which should also have been worked out by opening long positions. The price crossed the 1.3773 level again, but did not reach the target line of Senkou Span B again. So traders could either manually close this deal at minimum profit, or wait until it closes by Stop Loss at breakeven. In general, it is also far from being the most successful day in terms of trading, but, nevertheless, it is profitable.
GBP/USD 1H
Everything looks dull and monotonous on the hourly timeframe. Low volatility here, much better than on the 5-minute timeframe. The technical picture on this timeframe has not changed at all over the past day. However, what could you expect from a pair that passed 60 points in half a day? In the UK, there were no important reports and events during the day, meanwhile, Federal Reserve Chairman Jerome Powell was set to deliver a speech in America, but it also did not give anything. There is nothing to say about the summary of economic forecasts, the "Beige Book". So now, when there is no clear trend, it is very important to trade from levels and lines. When rebounds from them and overcomes, signals will be generated. The most important levels today are 1.3677, 1.3724, 1.3773 and 1.3812. Senkou Span B (1.3811) and Kijun-sen (1.3738) lines are also important, and signals can also form around them. Rebounds or breakthroughs of these price values will be sources of signals. As before, you are advised to set the Stop Loss level at breakeven when the price passes 20 points in the right direction. The nearest level/line is always used as targets (exceptions - if the target is too close to the signal). No major events scheduled for Thursday in the UK, so traders will have to focus on medium-strength US reports. Industrial production, the number of new unemployment claims and retail sales are all things worth looking out for today.
We also recommend that you familiarize yourself with the forecast and trading signals for the EUR/USD pair.
COT report
The GBP/USD pair rose by 140 points during the last reporting week (March 30 - April 5). By the way, the charts shows how strong the downward correction has been in the last month and a half! And the entire upward trend doesn't even fit into the chart! The recent Commitment of Traders (COT) reports indicated that the sentiment of the non-commercial group of traders was becoming moderately more bearish. The second indicator shows a systematic decline in the net position of non-commercial traders. The green and red lines of the first indicator have been moving towards each other in recent weeks. However, we continue to pay attention to the fact that the green and red lines would change the direction of movement every couple of weeks before, which indicates that the most important groups of traders did not have a single trading strategy. But at the same time, the pound continued to grow. It turns out that the data from the COT reports simply did not coincide with what is happening in the currency market for the pound/dollar pair. Big players did not build up long or short positions, but the pound was still growing. From our point of view, the inflation factor of the money supply in the United States worked. The dollar was simply getting bigger. Therefore, the dollar's exchange rate fell, and large players could trade as they wanted, they simply did not exert the same strong influence on the pair's exchange rate as the US authorities, which poured trillions of dollars into the economy. We believe that we can see something similar this year, as the United States continues to saturate the economy with liquidity, and soon Americans could become more active, starting to get the money accumulated during the pandemic from under their pillows. Thus, the COT report for the pound does not allow any long-term conclusions to be drawn.
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.
