GBP/USD 5M
The GBP/USD currency pair once again updated its 2-year lows on Tuesday and seems to be seriously aiming for absolute lows, which are located around the 1.1400 level. An upward correction began in the afternoon, but at the moment it is so insignificant that no conclusions can be drawn from it. The question that traders are interested in now is when the collapse of the euro and the pound will end? And no new conclusions can be drawn from yesterday. The pair corrected by 100 points - this is an absolutely banal movement for the British currency in recent months. There was not a single significant event in the UK and the US yesterday, however, the volatility was again at its height, and the price did not stand in one place. The pair is also below all the lines of the Ichimoku indicator, so for now we do not expect strong growth.
There were three trading signals on Tuesday. In the first two cases, the price bounced off the extreme level of 1.1874, but since there was no other level below this level, it was possible to close short positions only manually. In this case, it was possible to make a profit of several tens of points. In another case, both trades were closed by Stop Loss at breakeven, as the price went down 20 points both times. The third signal was for a buy, and after its formation, the pair went up 20-30 points, and traders could earn from it. All in all it wasn't a bad day.
COT report:
The latest Commitment of Traders (COT) report again showed insignificant changes. During the week, the non-commercial group opened 4,400 long positions and 7,500 short positions. Thus, the net position of non-commercial traders decreased by 3,100. But what does it matter if the mood of the big players still remains "pronounced bearish", which is clearly seen in the second indicator in the chart above? And the pound, in spite of everything, still cannot show even a tangible upward correction? The net position fell for three months, then grew for several weeks, but what's the difference if the British currency is still depreciating? We have already said that the COT reports do not take into account the demand for the dollar, which is probably still very high right now. Therefore, even for the strengthening of the British currency, the demand for it must grow faster and stronger than the demand for the dollar. The non-commercial group now has a total of 96,000 shorts open and only 39,000 longs. The net position will have to show growth for a long time to at least equalize these figures. Neither macroeconomic statistics nor fundamental events support the UK currency. As before, we can only count on corrective growth, but we believe that in the medium term, the fall of the pound will continue.
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GBP/USD 1H
The pound began a new round of upward correction on the hourly timeframe. Above is the Kijun-sen line, which is critical for maintaining any trend, as well as the trend line. If both of these lines miss the pair above themselves, then we can talk about the beginning of a short-term upward trend. In case of a rebound from any of them, the downward movement will resume. We highlight the following important levels on June 13: 1.1807, 1.1874, 1.1974, 1.2106, 1.2175. Senkou Span B (1.2105) and Kijun-sen (1.1928) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. The UK is set to release important reports on GDP and industrial production. We believe that the reaction to these data may be a movement of 20-30 points, no more. A report on US inflation will be released in the afternoon, about which a lot has already been said. Bulls are now pinning their hopes on this report. If inflation shows a slowdown, the dollar may continue to fall, which began on Tuesday.
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.
