GBP/USD 5M
Yesterday, the GBP/USD pair continued to trade in the same mode as on Monday and Tuesday. We have warned that the pair is likely to continue unprocessed movements in all recent articles, so it may be better not to trade it for several days. Basically, this advice was very useful, as Wednesday's movements still left a lot to be desired. Until the very evening, when the results of the Federal Reserve meeting began, their announcement and a press conference with Jerome Powell, that is, when traders had to leave the market and close all deals, the pair continued to move in the swing mode. To better understand what we mean by the concept of swing, let's look at all the movements of the pair within the day: 44 points down - 35 up - 34 down - 60 up. That is, the pair just jumped up and down all day and it was very difficult to make money on this. If the movements themselves were at least 60-70 points, then it would still be possible to look for signals. But in the current situation, the best solution would be to not enter the market at all. Nevertheless, several signals were generated on the 5-minute timeframe, so they should be considered and conclusions should be drawn from them. The first two - identical - rebound from the extremum level of 1.3886 in the European session. The price went down 16 points after the first, 20 points the second, which, at best, would be enough to set Stop Loss to zero. Naturally, the pair did not reach any immediate goal. And so, the best solution would be to manually close these positions. When a buy signal was formed to surpass the 1.3886 level in the afternoon, it should not have been worked out at all, since two signals had already formed from this level, which did not lead to profit, and the pair continued to trade, as if it was reluctant. It is noteworthy that the pound began to rise with the euro during the US session. Although in the latter's case, we concluded that European Central Bank President Christine Lagarde's speech had an impact on this movement. It is quite possible that in reality the markets began to sell the dollar ahead of the results of the Fed meeting, therefore the pound also began to grow. We are not considering the events following the Fed meeting. In any case, you shouldn't have traded during them.
GBP/USD 1H
The technical picture on the hourly timeframe still requires no explanation. The upward trend was canceled, as the pair began to move openly sideways and it did not surpass the trend line. The pound continues to move in a "swing" mode on almost all timeframes, starting from the 4-hour hour and down. Perhaps the situation will change after summing up the results of the Fed meeting. But so far, the conclusions can be disappointing: it is very inconvenient to trade the pair, the movements are weak and constantly alternating. Now the technique also generates false signals, and in general the situation is very unfavorable and threatens with losses. We will continue to pay attention to the most important levels and lines on Thursday: 1.3945, 1.3886, 1.3835 and Kijun-sen (1.3915), Senkou Span B (1.3850). However, there is no guarantee that a strong signal will be generated even if the price is near them. You are advised to set the Stop Loss level at breakeven when the price passes in the right direction by 20 points. The nearest level/line is always used as targets (exceptions - if the target is too close to the signal). No major events scheduled in the UK again on Thursday. Meanwhile, the US is set to release its GDP data for the first quarter as well as a minor report on claims for unemployment benefits. It wouldn't be the worst decision to not enter the market with the pound/dollar pair for several days.
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.
