GBPUSD 15M
The lower linear regression channels turned to the downside on the 15-minute timeframe, which is absolutely logical after the price failed to overcome the 1.3397 level. However, the downward movement entirely depends on the ability or inability of traders to overcome the critical Kijun-sen line.
GBPUSD 1H
The GBP/USD pair reached the resistance level of 1.3397 for the second time, rebounded from it for the second time and began a new round of corrective movement within the same upward channel, reaching its lower boundary by the end of Thursday, November 26. At the same time, the pound/dollar pair reached the critical Kijun-sen line, which was moving towards the price. Now, if the quotes rebound off these two supports, then the upward trend may resume. The fundamental background is not on the pound's side, however this was also the case a week ago, and the British currency was still growing in price. If the bears push through the Kijun-sen line and the lower channel line, this will be a serious step towards a new downward trend that has been brewing for a long time. We still believe that the pound has no prospects, and it is becoming more expensive solely due to the markets' faith in a bright future (in the free trade deal between the UK and the EU).
COT report
The GBP/USD pair rose by 25 points in the last reporting week (November 10-16), although the volatility was quite high during this time period. However, the Commitment of Traders (COT) report has not provided us with any important information that could help in forecasting and trading for several weeks now. Recall that the red and green lines must move away from each other or sharply change the direction of their movement, so that we can conclude that one trend ends and another begins. In recent months, both lines regularly change their direction, which indicates the absence of signals based on COT reports. What can we say about the most important group of non-commercial traders? This group opened 533 contracts to buy the pound and 616 contracts to sell during the reporting week. Therefore, it doesn't even make any special sense to calculate the change in the net position or the amount by which the attitude of professional traders has changed. A little more than 1000 contracts per week is very little. Therefore, in essence, there are no changes. What do we end up with? There are no changes, and the general picture of things does not make it possible to predict any definite development of the situation. So now it is better to pay more attention to technique and foundation.
The foundational backdrop for the British pound was hilarious on Thursday. There were no macroeconomic statistics that day, but that is not required for the pound right now anyway. Market participants are overwhelmingly focused on the information regarding the negotiations on the Brexit trade talks, although, to be honest, it would be better if they did not pay attention to it at all. Head of the European Commission Ursula von der Leyen said that the next few days will be extremely important and the EU is ready for Brexit to have no deal. Michel Barnier threatened David Frost with withdrawing from negotiations this week (or at all?) If London continues to take a principled and uncompromising position. The French foreign minister accused London of dragging out the talks. And the turn to make a statement came to the chief negotiator from Great Britain, David Frost, who said that London wants to resume negotiations with Brussels one-on-one, but everything depends on the European partners whether they want a new meeting. Thus, both sides continue to rush phrases that are designed to show the world community that they are not to blame for the failure of the negotiations if something happens. These statements do not carry any semantic meaning and are only meant to confuse.
No major events or macroeconomic reports from the UK and the United States for today. Market participants will monitor any news related to the trade talks. Of course, this is not the only topic that can influence the pound. However, for now, traders do not want to pay attention to them. We have said more than once that if we take the entire fundamental background into account, then the pound has no reason to rise in price against the dollar. Nevertheless, the upward trend remains within the rising channel.
We have two trading ideas for November 27:
1) Buyers for the pound/dollar pair continue to hold the initiative in their hands and did not let the price go below the Kijun-sen line (1.3328) and below the rising channel. Thus, we advise you to trade upwards while aiming for the resistance levels of 1.3397 and 1.3483 as long as the price is within the rising channel and above the critical line. Take Profit in this case will be up to 120 points.
2) Sellers failed to get the pair to settle below the rising channel. If the price settles below the Kijun-sen line (1.3328) and below the rising channel, you are advised to sell the pair while aiming for the Senkou Span B line (1.3251) and the support level of 1.3191. Take Profit in this case can range from 60 to 130 points.
Forecast and trading signals for EUR/USD
Explanations for illustrations:
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.