GBP/USD 5M
The GBP/USD pair also traded relatively calmly over the past day. Thursday's volatility was around 70 points, which is absolutely average value for the pound. During the day, macroeconomics that could affect the pair's movement are marked with the numbers "1" and "2" on the chart. As you can see, neither after the batch of US reports were released, nor after the speech of Bank of England Governor Andrew Bailey, were there any fundamental changes in the pair's movement. Moreover, yesterday's trade was held exclusively on technique. If you look at the 4-hour timeframe, you can see an extremely accurate and clear rebound from the critical line. It is also visible on the 5-minute timeframe and it was the only signal of the day that should have been worked out. After this signal was generated, the pound/dollar pair went up by about 45 points and reached the resistance level of 1.4059, which had already been worked out several times earlier. Thus, about 42 points of profit could be earned on a long position. The 1.4059 level is not an extreme, so signals did not form around it. And important levels or lines of the Ichimoku indicator were not reached either.
GBP/USD 1H
The pound/dollar pair corrected on the hourly timeframe yesterday, both to the Kijun-sen line and to the level of 1.4008. Thus, the correction can be considered complete and, logically, the upward trend can be resumed today. This can only be prevented by the overbought pound, which has been growing for more than a year. However, we also reminded you that both the speculative factor and the fact that the American economy is being pumped with trillions of dollars have been working for the pound. Both of these factors work in favor of the pair's growth. Therefore, despite overbought, the upward movement may continue. We continue to pay attention only to the most important levels and lines: 1.4008, 1.4080 and 1.4181. Senkou Span B (1.3978) and Kijun-sen (1.4028) lines can also become signal sources. It is recommended to set the Stop Loss level at breakeven when the price passes 20 points in the right direction. There are no major reports or events scheduled for Friday in the UK. However, during the whole current week there were very few of them. Several speeches by Bank of England Governor Andrew Bailey did not give the markets any new information. In fact, the key event of the week was the US inflation report, but the reaction to it should have already been left behind. Today, the pair's movement could be influenced by the US retail sales report for April. Especially if its value is high relative to forecasts (+ 1.0% m/m). The rest of the data is likely to be ignored by traders.
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 15 points during the last reporting week (April 27-May 3). A slight change in price, but the pair did not stand still. Professional traders closed 7,600 buy contracts and opened almost 2,000 sell contracts during the same period of time. Thus, the net position for the "non-commercial" group of traders has decreased by almost 10,000 contracts, which is a lot for the British currency. In other words, the mood of the major players has become less bullish. Now let's take a look at the chart of the movement of the pound/dollar pair and note that there is no weakening of the upward movement there. On the contrary, the movement has intensified (albeit only in recent days, which are not covered by the latest COT report). However, in any case, a strong decrease in the net position usually reflects a fall in the currency. In our case, there was no drop even in the days covered by the latest COT report. In general, the data on the COT reports are now completely different from what is happening in the market. We always say that absolutely any data that is used in trading must be confirmed by technical signals. Thus, at this time, the data from the COT reports are not confirmed. We have already discussed why this can be so. First, the COT reports for the pound clearly do not take into account the increase in supply in the US dollar market. Secondly, the COT reports are released with a delay of several days, so the pound's rise by 300 points can be reflected by the specific actions of the major players in the next report. However, in any case, based on the COT reports, no important conclusions can now be drawn for any future.
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.
