GBP/USD 1H
The GBP/USD pair continues to move extremely cheerfully and illogically. In the middle of last week, we could conclude (like many other traders) that the pound will nevertheless start a downward trend, as it made five unsuccessful attempts to continue the upward movement above the 1.3745 level and eventually cross the support area of 1. 3606-1.3626. But the Bank of England and Governor Andrew Bailey's statements confused all the cards for traders. To be honest, Bailey did not tell the markets anything overly optimistic. However, his words were interpreted by traders as something that was in favor of the pound and so a new round of growth for the pound began on that day. As a result, the pair returned to the 1.3745 level yesterday. Now what? Everything is the same as the previous week. In case the price rebounds from the 1.3745 level, we can expect a new round of downward movement by 100-150 points. We can expect a succeeding upward movement in case the price surpasses the 1.3745 level, but not the fact that it will be strong. Recall that a couple of weeks ago, the bulls also struggled with the 1.3700 level, breaking it on the fifth or sixth attempt, but over the next couple of weeks they were able to move up only 50 points. Thus, it is far from certain that we will see a new strong strengthening of the pound.
GBP/USD 15M
The higher linear regression channel is directed to the upside on the 15-minute timeframe, while the lower one, after another unsuccessful attempt to overcome the 1.3745 level, turned to the downside. Moreover, we can clearly see that the price simply pricked the 1.3745 level on the 15-minute timeframe, without spending 15 minutes above it. Thus, the likelihood of something new seems to fall.
COT report
The GBP/USD pair fell by 20 points during the last reporting week (January 26-February 1). Despite the fact that price changes were nearly non-existent in recent weeks, the uptrend continues to persist and is clearly visible. The pound continues to rise despite the fact that the latest reports do not unambiguously indicate a growth in interest for the British currency among professional traders. A paradoxical situation that is difficult to explain. The latest Commitment of Traders (COT) report revealed that the non-commercial group of traders opened 5,500 buy contracts (longs) and almost 5,500 sell contracts (shorts) during the reporting week. Thus, the net position for this group of traders has not changed, and the sentiment of the major players has not changed. Basically, this conclusion coincides with the scale of price changes over the reporting week. As for long-term prospects, there is still no clear and logical conclusion. The total number of open buy contracts for professional traders is still higher than that of the sell, but the advantage is not too large (55,000 versus 44,000). The indicators, which are designed to visualize changes in the mood of large traders, continue to show the absence of a "single party line". The mood of non-commercial traders is constantly changing, as indicated by the green line of the first indicator. The mood of commercial traders is also constantly changing, which is signaled by the red line of the first indicator. And in technical terms, it seems like the pound will collapse by 500 points tomorrow, but the fundamental background contradicts this hypothesis. An extremely confusing situation.
Bank of England Governor Andrew Bailey delivered a speech on Monday, but the pound's growth by 60 points during the day was unlikely associated with this event. Take note that the pound initially fell by 60 points, and then it started to rise. Thus, the fundamental and macroeconomic background did not influence the pair's movement on Monday. Traders have simply been doing their favorite thing lately - trying to gain a foothold above the 1.3745 level.
The UK and US macroeconomic calendar will be completely blank on Tuesday, February 9. Thus, the fundamental background will not hold any particular influence on this day. We already said over the weekend that at the beginning of this week it will be possible to understand whether market participants are going to continue pushing the pound to the upside, since there will be no important events and it will not be possible to link the pound's growth to these events. So far, the reinforced level of 1.3745 holds the onslaught, but nevertheless it will not be able to resist the pressure of the bulls forever. Therefore, you also need to be prepared for its breakthrough.
We have two trading ideas for February 9:
1)The price has left the rising channel and is currently trading in the horizontal channel (1.3620-1.3745). Therefore, you are advised to trade bullish when the price surpasses the 1.3745 level, with the first target at the resistance level of 1.3804. Take Profit in this case will be up to 50 points. You can also open long positions when the price rebounds from the Senkou Span B lines (1.3683), Kijun-sen (1.3656) or the 1.3635 level while aiming for the 1.3745 level.
2) Sellers were unable to overcome the 1.3606-1.3626 area, so the pair's downward movement was temporarily canceled. Nevertheless, in case the price rebounds from the 1.3745 level, we recommend selling the pair again with the targets at the support level of 1.3700 and the Senkou Span B lines (1.3683) and Kijun-sen (1.3656). Take Profit in this case will be from 30 to 70 points. The downward movement is not a trend, so if you trade, then do so in small lots.
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.