GBP/USD 5M
The GBP/USD currency pair traded quite calmly on July 12, and the overall volatility of the day was about 70 points, which is about the same for the pound as 50 points for the euro. However, for the British currency, the main thing is different: the bulls failed to overcome the psychological level of 1.4000 once again, from which the price has rebounded several times in the past. Therefore, the succeeding upward movement is postponed, although, of course, overcoming the 40th level may only be a matter of time. Recall that global fundamental factors remain on the side of the British currency, although, of course, the local fundamental background is extremely weak. But the markets do not pay attention to the local background, so there are still more chances for the pound to continue growing. Nothing interesting happened in the UK either. However, several trading signals were generated during the day. Unfortunately, not all of them were correct, as in the case of the euro/dollar. The first signal of the day was very imprecise and unclear. The price reached the Senkou Span B line and the extremum level of 1.3859 and initially overcame them, then bounced back, then surpassed them again. As a result, a sell signal was generated, which turned out to be false, since the price could not go down to the critical line. The second signal also turned out to be false. Therefore, in terms of a short position, traders could get a loss of 17-18 points. A buy signal was already formed at the beginning of the US trading session, as the price broke through the level of 1.3859 and the Senkou Span B line. Traders could open long positions, which brought profit in the amount of the same 17-18 points. The price also bounced off the extremum level 1.3898, but this signal was, as they say, at the discretion of traders. It was formed already in the middle of the US trading session, so it could no longer be worked out. In any case, it could bring no more than 10 points of profit. Therefore, it was not possible to earn using the pound on Monday.
Overview of the EUR/USD pair. July 13. Coronavirus attacks again. The global economic recovery is under threat again.
Overview of the GBP/USD pair. July 13. An abnormal and illogical pound.
GBP/USD 1H
There is still no trend line or channel on the hourly timeframe, and the pound's movements look very unusual. Since the price has broken the previous local high, there are certain hopes that the upward movement will continue. However, traders could not overcome the level of 1.3898 (1.4000) on Friday and Monday, so now there are doubts that the upward movement will continue. Overall, the pound/dollar pair is still the most confusing currency pair at this time. In technical terms, we continue to draw your attention to the most important levels and recommend trading from them: 1.3800, 1.3859, 1.3898 and 1.4000. Senkou Span B (1.3834) and Kijun-sen (1.3825) lines can also be sources of signals. It is recommended to set the Stop Loss level at breakeven when the price passes 20 points in the right direction. The Ichimoku indicator lines can move during the day, which should be taken into account when looking for trading signals. The minutes of the Bank of England meeting will be published in the UK on Tuesday, as well as a report on financial stability. However, these are not events that can be worked out by the markets. Traders should look out for the US inflation report.
We also recommend that you familiarize yourself with the forecast and trading signals for the EUR/USD pair.
COT report
The GBP/USD pair fell by 35 points during the last reporting week (June 29-July 5). However, Friday's upward gains in the British currency were not included in the latest published Commitment of Traders (COT) report. Thus, we cannot yet know if the mood of the major players has become more bullish over the past few trading days. As a reminder, COT reports are released with a three-day delay. However, even according to the latest published COT report, we can conclude that the group of "non-commercial" traders has become more bullish. Professional traders opened almost 5,000 buy contracts (longs) and almost 2,000 sell contracts (shorts) during the reporting week. Thus, the net position of this group of traders increased by 3,000 contracts. The total number of open purchase contracts also exceeds the number of sales contracts. Therefore, the British currency, according to COT reports, has an excellent chance of resuming the upward trend. Moreover, global technical and fundamental factors also speak in favor of this. The indicators are now showing complete uncertainty. On the one hand, the green and red lines (net positions of the "non-commercial" and "commercial" groups) are approaching each other, which indicates the end of the trend. On the other hand, when the pound was actively growing, these lines did not move away from each other, which suggests the presence of external important factors that affect the supply and demand of the dollar and the pound. The second indicator shows that the net position of professional traders has been declining since March, but their mood is still bullish.
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.