GBP/USD 5M
The GBP/USD pair resumed the downward movement on September 24, as evidenced by both linear regression channels that are directed downward. The pair traded quite actively last Friday, although there were practically no macroeconomic reports and fundamental events that day. Thus, nothing influenced the pair's movement, except for the technical picture. Unfortunately, the pair moved in a radically opposite way than the EUR/USD pair. If the euro stayed in one place throughout the European session, the pound was trading in a narrow horizontal channel in the US session. It is difficult to say what caused such a difference in movements, since there was no important news and reports. However, traders had to work with what they had. No trading signals generated during the European trading session. The first signal was formed, in fact, when the movement had already ended. This signal was in the form of surpassing the critical Kijun-sen line and turned out to be false, but it could have been used to avoid losses, since the price reached the support level of 1.3663 and bounced off it. Consequently, a signal was received to close short positions. However, we remind you that regular support and resistance levels are not sources of signals. Therefore, long positions should not be opened. The next signal was formed near the same critical line, but for a buy. It also turned out to be false, since the upward movement was not continued. Therefore, it should have been manually closed when the price settled below the Kijun-sen line. The loss was 15 points. All subsequent signals near the Kijun-sen line should not have been worked out, since at that moment two false signals had already been formed, and the movement ended.
GBP/USD 1H
The GBP/USD pair began a strong upward movement on the hourly timeframe last week, but it was in a downward trend on Thursday and Friday. As the level of 1.3600 still remains unbreakable, further prospects for the dollar's growth remain a big question. Nevertheless, you should not give up on this scenario. It just needs to be worked out, if the price settles below 1.3600, not earlier. So far, a new upward trend has not been formed, so one should pay more attention to the lower timeframe. On September 27, we distinguish the following important levels: 1.3519, 1.3570, 1.3601 - 1.3607, 1.3732, 1.3785 - 1.3794. Senkou Span B (1.3775) and Kijun-sen (1.3679) lines can also be sources of signals. It is recommended to set the Stop Loss level at breakeven when the price passes in the right direction by 20 points. The Ichimoku indicator lines can move during the day, which should be taken into account when looking for trading signals. No major events scheduled in the UK and the United States on Monday, so the pound/dollar pair may move stiffly and with low volatility. However, in the coming days, traders should understand how the market is set up in relation to the 1.3600 level. If it is not overcome, then the likelihood of a new upward trend will increase even more.
We also recommend that you familiarize yourself with the forecast and trading signals for the EUR/USD pair.
COT report
Major players weakened their bullish sentiment during the last reporting week (September 14-20). Although it is now as neutral as possible. The fact is that the value of the net position for the group of "non-commercial" traders is now equal to 0 (approximately). Consequently, neither bulls nor bears have the initiative. Moreover, in the last couple of months, the mood of professional traders has been constantly changing, as the net position is either increasing or decreasing. Thus, from our point of view, the conclusion is obvious: the Commitment of Traders (COT) report does not indicate either bullish or bearish sentiment. The problem lies in the plane of the same level of 1.3600, which can be seen in the second chart even better than in the first one. The pair cannot go below this level, but it is not yet able to start an upward trend. Therefore, we need to wait for a new development of the level of 1.3600. Although this week it has already done so and another rebound followed. Therefore, an upward movement to the previous local high may begin next week. We also draw attention to the fact that the pound was unable to continue its downward movement even at a time when non-commercial traders were actively increasing their short positions. This "dip" in the net position below zero is clearly visible on the charts of both indicators in the chart. That is, the pound did not fall below 1.3600 even when it was actively sold by large players.
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.
