GBP/USD 5M
The GBP/USD pair was trading in different directions on Friday, April 23rd. On the hourly timeframe, one could see that the upward trend was formally preserved due to the trend line, however, in fact, the pair may now continue to move down by another 150 points due to the persistent swing mode. Last Friday, the bulls tried to start a new upward movement during the European session, but their attempts quickly broke down at the 1.3891 level, and the pair went flat. The bears also failed to build on the previous days' success. Macroeconomic reports that were published during the day practically had no effect on the pair's movement. The numbers "1", "2", "3", "4" mark the time of release of reports on retail sales, business activity in the UK, business activity in the US and Janet Yellen's speech. As you can see, none of these events led to serious price changes.
Now let's move on to signals. Of course, you shouldn't have traded during the flat in the European trading session. There could be problems with identifying the flat itself, since it is impossible to quickly understand that a flat has begun, especially when it comes to intraday trading. Therefore, traders could open two deals from the Kijun-sen line, which would be unprofitable. More precisely, one to sell, when the price settled below the critical line, since the buy signal immediately rested on the 1.3891 level, which is located nearby and bulls could not surpass it. The loss could have been around 17 points. There was no need to trade further from the Kijun-sen line. Then there was a rebound from the extremum level of 1.3846 during the US session, which should have been interpreted as a buy signal, but, unfortunately, it turned out to be false too. Another 13 points of loss. The next rebound from the 1.3846 level was very fuzzy, however, after it appeared, the price finally began to move in a normal way and so traders could earn some money, since the Kijun-sen line was subsequently reached, and the signal brought around 23 points of profit, which partially covered the losses on the first two deals.
GBP/USD 1H
The technical picture on the hourly timeframe still requires no explanation. The upward trend is maintained thanks to a weak uptrend line, and a rebound from it triggered a small upward movement. Unfortunately, the pound continues to move in a "swing" mode, which is clearly visible on the 4-hour timeframe. Therefore, in spite of the fact that according to the technique we can now expect the resumption of the upward movement, it is quite possible that the pair will continue to move down by another 150 points, thereby breaking the trend line. Therefore, trading from levels and lines is still a very important aspect. Signals will be generated when the pair rebounds from them or when breakthroughs are achieved. The most important levels today are 1.3807, 1.3835, 1.3886 and 1.3945. The Kijun-sen (1.3915) and Senkou Span B (1.3839) lines are also important - signals can also form around them. As before, it is recommended 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). There are no major events scheduled for Monday 26 April in the UK, and we will only receive a report on durable goods orders in the US, which could theoretically trigger a market reaction.
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 200 points during the last reporting week (April 13-19). As for the Commitment of Traders (COT) report, the latest results did not show any significant changes in the balance between buy and sell contracts for the group of non-commercial traders. Non-commercial traders opened 10,500 Buy-positions (longs) and 8,200 Sell-positions (shorts) during the reporting week. Thus, their net position slightly increased by 2,300 contracts, and the sentiment became a little more bullish. However, these are not changes from which new conclusions can be drawn. In general, the upward trend remains for the pound, and this is the most important thing. As in the case of the euro, the COT reports do not indicate that the upward trend is maintained, the key influence is the fact that trillions of dollars are currently being injected into the US economy, not due to behavior of large players. If you look at the first indicator, you can see how the red and green lines often intersect, which indicates that there is no clear idea in which direction to trade the pound at all! Now the green and red lines have moved away from each other, which formally means an upward trend. Therefore, based only on the COT reports, we can also assume further upward movement. However, we have already said that it will be very difficult for the pound to grow from a purely technical point of view, since this growth is already completely unreasonable. Although even if there is another couple of trillion dollars in the US economy, the pound will still be able to continue strengthening, despite the problems with the Northern Ireland Protocol, the Scottish issue, the weak recovery and a possible drop in GDP in the first quarter, the general decline economy due to Brexit and prospects that aren't that bright.
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.
