GBP/USD 5M
The GBP/USD currency pair started a new round of correction on Wednesday, but again failed to gain a foothold above both lines of the Ichimoku indicator. Therefore, the downward trend continues, and we have formed a downward channel to visualize what is happening. Now both major pairs are inside the descending channels and keep high chances for further decline. Of course, the channels do not mean that now the euro and the pound will fall 100% for two or three days. An important inflation report will be published in the United States, which can significantly affect the movement. The pair may also consolidate above the critical line. But we still state that the vast majority of indicators are now pointing down, while the foundation and geopolitics continue to be very difficult for risky currencies and assets. Reports on GDP and industrial production will be released in the UK. Both turned out to be weaker than forecasts, so it would be logical to see the pound's fall yesterday. Instead, we saw tangible growth. Notable - not because the movement itself was strong, but because the volatility of the pound/dollar pair remains very high and any movement is tangible.
Despite a pretty good movement during the day, the only trading signal was formed at night. The price bounced off the Senkou Span B line and the 1.0930 level, but at the time of the opening of the European trading session it had moved far enough away from the point of formation, so it was not necessary to open a position "to catch up". During the day there was not a single approach of the price to an important level or line.
COT report:
The latest Commitment of Traders (COT) report on the British pound showed minimal changes. During the week, the non-commercial group closed 17,700 long positions and 14,600 short positions. Thus, the net position of non-commercial traders decreased by 3,100, which is not a lot for the pound. We could assume that the actions of major players and the movement of the pound have finally begun to coincide, but the pound has already begun a new round of decline, which risks transforming into a continuation of the global downward trend. The net position indicator has been growing slightly over the past weeks, but the mood of the big players remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth of the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 91,000 shorts and 42,000 longs open. The difference, as we see, is still very large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? We remain skeptical about the long-term growth of the British currency, although there are still certain technical reasons for this.
We recommend to familiarize yourself with:
Overview of the EUR/USD pair. October 13. Emergency G-7 meeting and sixth Ramstein meeting.
Overview of the GBP/USD pair. October 13. Bank of England: QT program postponed, asset purchases will continue at a double rate.
Forecast and trading signals for EUR/USD on October 13. Detailed analysis of the movement of the pair and trading transactions.
GBP/USD 1H
The pound/dollar pair rolled back up again on the hourly timeframe, but so far this rollback is just a pullback, and not a resumption of the upward trend. If the pound manages to settle above the descending channel and the critical line, then the trend may change to a short-term upward one. But for now, everything says more about the fact that the fall will continue. In any case, there are no buy signals yet. We highlight the following important levels on October 13: 1.0538, 1.0930, 1.1212, 1.1354, 1.1442, 1.1649. Senkou Span B (1.1016) and Kijun-sen (1.1119) 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 positions. There will be no interesting events in the UK on Thursday, meanwhile, the US will release its inflation report. In fact, this report is the only event of the day, so all movements will pass through the prism of it. The reaction can be strong if the actual value is very different from the forecast.
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.
