GBP/USD 5M
The GBP/USD pair also fell like the European currency last Friday, April 30. However, if the euro simply began to correct in a longer term than the hourly timeframe, then the pound continues to move in the "swing" mode and Friday's downward movement is the next round. However, on the hourly timeframe, we are not very interested in what is happening on the 4-hour timeframe. It is just important to understand that the pound likes to change its direction every 7-10 days. Last Friday, the pair's quotes suddenly started falling during the European session. Moreover, if important reports were published in Europe at that time, then in Great Britain there were no publications. Thus, we can make an unambiguous conclusion that it was not the eurozone reports that caused the euro to fall on Friday. Surpassing the 1.3945 extremum level began a little later than when the European session opened, so the sell signal was formed earlier. But, fortunately for traders, the price returned to the 1.3945 level and bounced off it, forming a sell signal, which should have been reached. Thus, traders had to open short positions here with the Kijun-sen line as the target, which was soon worked out. This trade brought in 28 points of profit. A rebound followed from the critical line and, unfortunately, this was already a false buy signal, since the pair did not continue the upward movement after it was formed. But the quotes fell again at the beginning of the US session. And it resumed as unsuccessfully as possible for traders. The price of one five-minute candlestick went down 16 points, and this candlestick became a signal for new short positions, thus bringing the maximum loss on a long position at 26 points.
But, on the other hand, a sell signal was immediately formed, because the price crossed the critical line, and after 5 minutes, the extremum level of 1.3886 as well. Thus, traders had to open new short positions while aiming for the Senkou Span B line. The trade brought about 20 more points in profit. A false signal followed, as there was a rebound from the Senkou Span B line. The result: a long position and a loss worth 13 points. However, this did not end there either, because the price formed a sell signal when the price surpassed the Senkou Span B line, and then it immediately overcame the extremum level of 1.3835. A new short position brings another 28 points of profit and a new buy signal is immediately formed, as there is a clear rebound from the 1.3807 level. The pair rallies to 1.3835 - another 21 profit points - and bounces off it, forming another sell signal, and then falls back to 1.3807, bringing another 21 profit points. As a result, despite two false signals, traders could earn a very decent amount on Friday.
GBP/USD 1H
The quotes clearly collapsed on the hourly timeframe. The price has surpassed the important lines of the Ichimoku indicator, but there is still no trend now, since the pair had broken the rising trend line earlier, and the descending line cannot be drawn at this time. In general, the trend remains uncertain, which is somewhat confusing. A pullback to the top is likely to follow on Monday, but in any case, it will be possible to catch any movement on the 5-minute timeframe. We believe that this week the pair can calmly go down another 100-120 points within the swing from the 4-hour timeframe. We will continue to pay attention to the most important levels and lines: 1.3724, 1.3807, 1.3835 and 1.3886, as well as the Kijun-sen (1.3904), Senkou Span B (1.3850) lines. 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 should always be used as targets (exceptions - if the target is too close to the signal). No major events scheduled in the UK on Monday, and only the ISM Manufacturing PMI will be published in the US.
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 90 points during the last reporting week (April 20-26). The last few Commitment of Traders (COT) reports have shown that the mood among professional players is becoming more bullish again, but in general they themselves do not know what to do with the pound in the past year. Look at the first indicator in the chart. The green line is the net position of the non-commercial group of traders. It constantly changes the direction of movement, intersects with the red line (net position of the commercial group). In general, it is now impossible to predict the pair's succeeding movement based on COT reports. The pound rose in value against the dollar from October to March, although the green and red lines showed no trend at that time.
Major players closed 1,100 buy contracts (longs) and got rid of 5,000 sell contracts (shorts). Thus, their net position increased by 3,900 contracts, and the mood became more bullish again. In general, it also remains bullish, since the total number of buy contracts from professional players exceeds the total number of sell contracts twice. And so, of course, we can expect the pound to rise further, but we still believe that the swing will continue at this time. Too many conflicting factors are at the disposal of the markets. Constant changes in the direction of movement of the green line indicate that big players do not know what to do with the pound in the long term.
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.
