GBP/USD 5M
The GBP/USD pair, as well as the euro, was trading quite calmly on Friday, April 9. But if only two signals were formed for the euro/dollar, which did not bring profit, then much more signals were formed for the pound, and they were profitable signals. However, let's start with the fact that neither the US nor the UK published a report last Friday, and there was not a single more or less significant event at all. Thus, traders had nothing to react to during the day. The trades were inactive during the Asian session, as always. But with the opening of the European trading session, the bears began to put pressure on the pair and the first sell signal was immediately formed - surpassing the extremum level of 1.3724. This signal brought 43 points of profit, as the price perfectly reached the next extreme level of 1.3677. Moreover! The price rebounded off the 1.3677 level, immediately forming a buy signal, which should also have been worked out. Now the bulls have already begun to attack and they brought the pair back to the 1.3724 level. Another 37 points to the piggy bank. An ideal rebound from the 1.3724 level, therefore traders had to open new short positions. The third signal did not bring profit, but the price still went down 20 points, which was enough to set Stop Loss to breakeven, at which the deal was closed. The quote surpassed the 1.3724 level again a little later, but this signal turned out to be false and brought around 11 points of loss. The last fifth signal was formed literally a couple of hours before the market closed, so it shouldn't have been worked out anymore. Result: +70 points. All signals are marked with golden rectangles in the chart.
GBP/USD 1H
Everything looks less appealing on the hourly timeframe, although rebounds from important levels are noticeable here as well. Unfortunately, despite a clear downward trend, no trendline has been formed yet. A trend line simply cannot be drawn here, plus it would have a fairly strong slope, and such trend lines usually do not support the price. The fundamental and macroeconomic background will be weak, or rather absent on Monday. Thus, technical factors will come first on Monday. In general, we continue to recommend trading from important levels and lines, when rebounding from them and overcoming them. The most important levels and lines are 1.3677 and 1.3724. The Senkou Span B and Kijun-sen lines are also important, but the price is still far enough from them. Rebounds or breakthroughs of these price values will be sources of signals. As before, you are advised to set the Stop Loss level at breakeven when the price passes 20 points in the right direction. The nearest level/line is always used as targets (exceptions - if the target is too close to the signal).
We also recommend that you familiarize yourself with the forecast and trading signals for the EUR/USD pair.
COT report
The GBP/USD pair rose by 140 points during the last reporting week (March 30 - April 5). By the way, the charts shows how strong the downward correction has been in the last month and a half! And the entire upward trend doesn't even fit into the chart! The recent Commitment of Traders (COT) reports indicated that the sentiment of the non-commercial group of traders was becoming moderately more bearish. The second indicator shows a systematic decline in the net position of non-commercial traders. The green and red lines of the first indicator have been moving towards each other in recent weeks. However, we continue to pay attention to the fact that the green and red lines would change the direction of movement every couple of weeks before, which indicates that the most important groups of traders did not have a single trading strategy. But at the same time, the pound continued to grow. It turns out that the data from the COT reports simply did not coincide with what is happening in the currency market for the pound/dollar pair. Big players did not build up long or short positions, but the pound was still growing. From our point of view, the inflation factor of the money supply in the United States worked. The dollar was simply getting bigger. Therefore, the dollar's exchange rate fell, and large players could trade as they wanted, they simply did not exert the same strong influence on the pair's exchange rate as the US authorities, which poured trillions of dollars into the economy. We believe that we can see something similar this year, as the United States continues to saturate the economy with liquidity, and soon Americans could become more active, starting to get the money accumulated during the pandemic from under their pillows. Thus, the COT report for the pound does not allow any long-term conclusions to be drawn.
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.