GBP/USD 5M
The GBP/USD pair also continued its upward movement, which is clearly seen at once by the two linear regression channels directed to the upside on the 5-minute timeframe. The pound/dollar pair moved almost identically to the euro/dollar pair. As always, there was a complete flat during the evening, since this time does not account for more than 6% of all transactions opened in forex. With the opening of the London Stock Exchange, the bulls began to put pressure on the pair and the pound rushed up again. In fundamental reviews for the pound, we have repeatedly drawn your attention to the entire illogicality of the strengthening of this currency, but at the same time we concluded that thanks to the new stimulus package in the US, the British currency may well resume a long-term upward trend. Thus, although yesterday there was no information that could support the demand for the pound, it still grew during the day. The pair reached the 1.3972 level during the US session, which was the first target and around which it was possible to take profits on previously opened long positions. It was also possible to open new short positions near this level, but, as we mentioned in the euro/dollar analysis, the bears failed to reverse the upward trend and the quotes resumed their upward movement. Among the macroeconomic reports, one can single out that the most important report was on applications for unemployment benefits in the US, which turned out to be slightly better than the forecasted values, which could provide a slight support to the dollar. However, in the chart, we clearly see that there was no immediate reaction once this report was released, the pair slightly fell after 30 minutes, so we believe that the markets ignored this report.
GBP/USD 1H
We can see that the pair also continues its upward movement on the hourly timeframe, so the dollar seems to have started a new global segment of its decline. A new upward trend line has formed, which now supports bull traders and prioritizes long positions. The bulls have already come close to the Senkou Span B line, so they will have to confirm their intentions to form a new upward trend on Friday. If this line is overcome, then the chances of moving to the upside will increase many times over. However, take note that early in the morning, a fairly extensive package of macroeconomic statistics will be published in Britain, which may cause a reaction from traders and affect the general trend. The reports on GDP and industrial production are the most important for traders and the pound. Therefore, you should be attentive and be prepared for a possible strengthening of the movement or a sharp reversal of the price once these reports are published. In general, we continue to recommend trading from important levels and lines, during rebounds, and surpassing them. We give priority to bullish trading. As before, you should set the Stop Loss level when the price passes in the right direction by 15-20 points.
COT report
The GBP/USD pair fell by 140 points during the last reporting week (February 23-March 1). Despite the fact that the pound fell during the reporting week and continued to fall after it, the mood of the "Non-commercial" group of traders is becoming increasingly bullish. At a time when the probability of ending the upward trend, on the contrary, is growing. But we have what we have. Non-commercial traders closed 2,500 buy contracts and 8,200 sell contracts during the reporting week. Thus, the net position increased by about 6,000 contracts, and the mood of the major players became more bullish. This change is much better shown using indicators. The second indicator, reflecting just the change in the size of the net position of "non-commercial", shows the growth of this indicator over the past five weeks. At the same time, starting from mid-December, the green and red lines of the first indicator, which represent the sizes of the "commercial" and "non-commercial" net positions, move away from each other. And this is a sign of strengthening the trend. Thus, in general, the data of the COT report now speaks not of the end of the upward trend, but of its preservation and strengthening. As we mentioned earlier, any conclusions drawn from the COT reports or "foundation" require confirmation by technical signals. Therefore, take note of the conclusion drawn from the COT reports, but at the same time remember that the pair has settled below the Kijun-sen line on the 24-hour timeframe, and downward trends have formed on the lower timeframes.
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.