GBP/USD 5M
The GBP/USD currency pair moved about the same as the EUR/USD pair on Thursday. At first, there was almost a sideways movement, an attempt to continue the growth of the medium, but then a sharp collapse began. Moreover, it began exactly at the time when the results of the European Central Bank meeting were being summed up in the European Union. What do the results of the ECB meeting have to do with the British pound? That is why we believe that the ECB meeting was just an excuse or a reason for major players to take certain actions in the market, which can be called a "trap". One way or another, both major pairs have been moving illogically in the last two days. Yesterday, the fall of the British pound looked logical only from the point of view that the day before it showed the same illogical growth and eventually the pair simply returned to its original position. There were no macroeconomic statistics in the UK on Thursday, and only secondary reports were released in America, which had no effect on the pair's movement. Retail sales in March were almost completely in line with forecasts in terms of volume, and data on applications for unemployment benefits and consumer sentiment were not so important to work out.
There were only three trading signals on Thursday. As in the euro's case, the movement began much earlier than the first of them was formed. Nevertheless, when the price overcame the Senkou Span B line, it was possible to open short positions. Subsequently, the pair overcame Kijun-sen, but after that it could not continue the fall and eventually returned to the area above this line. It was when the price was settled above the critical line that it was necessary to close short positions. The profit on them could be 35-40 points. The buy signal should not have been worked out any more, since it was formed too late.
COT report:
The latest Commitment of Traders (COT) report on the British pound showed minimal changes in the mood of major players. For a whole week, the non-commercial group opened 5,200 long positions and 6,900 short positions. Thus, the net position of non-commercial traders decreased by 1,700. Even for the pound, such changes are insignificant. In general, the non-commercial group still has almost 2.5 times more contracts for shorts than longs. This means that the mood of professional traders is now "pronounced bearish". Thus, this is another factor that speaks in favor of the continuation of the pound's fall. The situation with COT reports for the pound is completely different than for the euro. According to the pound, the mood of the major players changes every couple of months, and sometimes even more often. At this time, the net position of the non-commercial group has already fallen to the levels where the last round of the pound's fall ended (the green line on the first indicator). Thus, we can even assume that in the coming weeks the pound will try to start a new ascent. However, the current fundamental and geopolitical background does not give good reasons to expect a strong growth of the British currency. Even taking into account the rate increase by the Bank of England.
We recommend to familiarize yourself with:
Overview of the EUR/USD pair. April 15. Is the market really counting on the strengthening of Lagarde's hawkish rhetoric???
Overview of the GBP/USD pair. April 15. The special operation in Finland has been canceled for the time being. Dmitry Medvedev explained the situation.
Forecast and trading signals for EUR/USD on April 15. Detailed analysis of the movement of the pair and trading transactions.
GBP/USD 1H
On the hourly timeframe, the pound showed a convincing increase of 170 points on Wednesday and a solid drop of 110 points on Thursday. As a result, the pound also failed to break through its previous local high (!!!) and it also maintains a downward trend, which is not supported by either a trend line or a channel. That is, the pair 's movements are as chaotic as possible, but at the same time the mood of most market participants is definitely bearish. We highlight the following important levels on April 15: 1.2981, 1.3050, 1.3119, 1.3175. The Senkou Span B (1.3081) and Kijun-sen (1.3058) 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. There are no important events and publications scheduled In Great Britain on Friday. Only one report will be released in America – on industrial production. The unjustified growth of the British currency has been won back, so today, perhaps, we are waiting for calm movements in a limited price range.
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.
