GBP/USD 5M
The GBP/USD currency pair was trading flat for most of the day on Monday. Despite the fact that the fundamental background, as they say, promises to be very strong, the pound has not shown any interest in a new fall. We have already said that the European currency is now much more likely to fall than the pound, which is explained by the significant difference in approaches to monetary policy between the Bank of England and the European Central Bank. Therefore, in principle, it is natural that the euro currency is falling, but the pound is not. But the pound is not growing at the same time, so the question arises, where in this case will the British currency move in the coming weeks? So far, this question remains unanswered. A very complex and incomprehensible technical picture has developed on all timeframes. No important macroeconomic statistics were published today, there were no important fundamental events for the pound. The emergency meeting of the Federal Reserve has already begun, but its results are still unknown.
As for trading, today was a "purely flat day". All trading signals were formed around one level (1.3525), which we removed from the charts at the end of the day. What is interesting: the first trading signal for a short position was just very good and could bring profit to traders. The price settled below the level of 1.3525 and almost managed to reach the Senkou Span B line, only a few points were missing. Nevertheless, the pair still went down about 25 points, which was enough at least to set the Stop Loss to breakeven. The next sell signal also turned out to be quite good, but the downward movement this time was weaker – only 15 points. Therefore, in this case, it was no longer possible to set a Stop Loss. Well, all subsequent signals should have been ignored, since by that time two false signals from the 1.3525 level had already been formed (the price had never reached the target level).
COT report
The latest Commitment of Traders (COT) report on the British pound showed a sharp increase in the bullish mood among the "non-commercial" group. During the week, professional traders opened 15,000 long positions and such changes are significant for the pound. It is not surprising that the major players behaved this way last week, since it was then that the Bank of England announced its decision to raise the key rate by 0.25%. However, the overall picture of the state of things provided by the COT reports now speaks of utter uncertainty. Let's start with the fact that even after the net position of large players has grown by 15,000, their mood is called bearish, since the total number of open long positions per pound is less than the total number of open short ones. Moreover, the chart above clearly shows that the green and red lines of the first indicator, which display the net positions of the two most important groups of traders "commercial" and "non-commercial" are now again near zero. And finding the net position indicator near the zero mark means that the number of long and short positions is approximately the same. Moreover, recent changes in net positions do not give grounds to conclude that the trend has ended now or a new one is starting. Roughly speaking, the mood of the players is changing too quickly, so it is impossible to talk about any long-term trends now.
We recommend to familiarize yourself with:
Overview of the EUR/USD pair. February 15. "Geopolitics" and an emergency meeting of the Fed. How will it end?
Overview of the GBP/USD pair. February 15. Boris Johnson takes an active part in resolving the US–Ukraine–Russia conflict.
Forecast and trading signals for EUR/USD on February 15. Detailed analysis of the movement of the pair and trading transactions.
GBP/USD 1H
The technical picture is very eloquent on the hourly timeframe. The nature of the movement is clearly visible and does not even require any special explanations. The pair is in "swing" mode and ignores almost all important lines and levels. The upward trend line has been canceled, but there is no new trend now. And there is no explicit side channel either. Therefore, the situation remains as confusing as possible. On February 15, we highlight the following important levels: 1.3439, 1.3489, 1.3609, 1.3643. The Senkou Span B (1.3495) and Kijun-sen (1.3569) lines can also be signal sources. Signals can be "bounces" and "breakthroughs" of these levels and lines. It is recommended to set the Stop Loss level to breakeven when the price passes in the right direction by 20 points. The lines of the Ichimoku indicator can move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels on the chart that can be used to take profits on transactions. On Tuesday, the UK is scheduled to publish reports on unemployment, the number of applications for unemployment benefits and wages. These are not the most important reports, but they can have a certain impact on the pound/dollar pair. In the US, the results of the Federal Reserve meeting should be known today, which can affect the pair much more than all other reports combined.
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.
