GBP/USD 5M
The GBP/USD currency pair again showed nothing outstanding on Tuesday. Last day's volatility was about 60 points, which is an average value closer to the weak. The pair has been trading inside the horizontal channel all day, as evidenced by both linear regression channels. However, it is also clearly visible. No important event or report in either the UK or the US. In the last few days, the market has been generally difficult with "macroeconomics" or "foundation". This week, in general, everything is very complicated with news and events. The market is now focusing its attention on the geopolitical situation in Ukraine, as there is nothing else to focus on. The "second phase" of the "special operation" began there. Now its goals are called the expansion of the DPR and LPR to the borders of Donetsk and Luhansk regions. And with such "geopolitics" it is very difficult to count on the growth of the euro or the pound.
There were three trading signals on Tuesday. All three times the pair bounced from the 1.2981-1.2987 area. The first time it managed to go up 43 points, the second – 10, the third time – 15. The most interesting thing is that all three trading signals were quite strong. At least none of them were canceled and did not lead to losses. Thus, it was possible to make a small profit on any of them, but definitely not losses, since the pair never managed to settle below the 1.2981-1.2987 area.
COT report:
The latest Commitment of Traders (COT) report on the British pound has witnessed a new strengthening of the bearish mood among professional traders. During the week, the non-commercial group closed 300 long positions and opened 10,900 short positions. Thus, the net position of non-commercial traders decreased by another 11,000. Such changes are significant for the pound. The non-commercial group has already opened a total of 88,600 short positions and only 35,500 long positions. Thus, the difference between these numbers is almost threefold. 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 fall of the British currency. Note that in the case of the pound, the data of COT reports are completely different from the data on the euro. According to the pound, the mood of the major players changes every couple of months, but at this time it absolutely corresponds to what is happening on the market. 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.
We recommend to familiarize yourself with:
Overview of the EUR/USD pair. April 20. The "Ukrainian crisis", in which the whole world can drown.
Overview of the GBP/USD pair. April 20. James Bullard: there is no time to argue, we need to raise the bid!
Forecast and trading signals for EUR/USD on April 20. Detailed analysis of the movement of the pair and trading transactions.
GBP/USD 1H
The pound continues to remain in a downward trend on the hourly timeframe and not far from its 15-month lows. Thus, even taking into account the strong movements last week, the overall technical picture does not change in any way. There is still no trend line or channel, and the pair's movements are very chaotic. This is clearly noticeable in the last six trading days, during which we observed both strong growth, a collapse, and a flat with scanty volatility. We highlight the following important levels on Wednesday: 1.2981-1.2987, 1.3050, 1.3119, 1.3175. The Senkou Span B (1.3069) and Kijun-sen (1.3062) 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. No important events and reports scheduled for Wednesday in the UK again. There is only the economic review of the Federal Reserve "Beige book" in the US, which rarely provokes at least some kind of market reaction. Most likely, today we are waiting for another boring day without any strong and good movements.
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.
