GBP/USD 5M
The GBP/USD pair was flat all day on August 10. Both linear regression channels are not only directed sideways, but also practically merged with each other. This means that the pair is in practically the same price range for about two days and it is very narrow. To be more precise, the pair has passed 40 points from the low to the high during the past day. And that's all there is to know about the movement of the pound/dollar pair on Tuesday. In the article on the euro/dollar, we already talked about the fact that with such volatility, signals can be formed either very rarely, or very often around some one level and line. In the case of the pound/dollar, it was the second option that emerged. Since the price was all moving in a flat, and the Senkou Span B line ran inside this channel, it is not surprising that the price crossed this line all day. The first buy signal was formed in the morning, and its traders had to work out with a long position. However, time passed, and the price did not continue its upward movement, did not reach the level of 1.3886 and continued to be above the Senkou Span B line. It only settled below this line during the US session, so the long position had to be manually closed at this point. The loss on the deal was about 12 points. All subsequent signals near the Senkou Span B line should not have been worked out anymore, since by that time the flat was clearly visible. Also, no major macroeconomic reports were released on Tuesday.
Overview of the EUR/USD pair. August 11. The hawkish statements of the Fed board members continue to support the dollar.
GBP/USD 1H
On the hourly timeframe, the pound/dollar pair continues its weakest downward trend after leaving the rising channel and breaking the rising trendline. Also, just yesterday, a descending channel was formed, which now supports those who are trading down. At this time, the price is located near the lower border of this channel, which in some way warns of a possible upward price movement. Given the low volatility and shaky movements, this option should not be ruled out at all. In addition, we want to remind you that in the long term, both major pairs are in a position where it would be very logical to start a new long-term upward trend. Thus, we continue to count on this scenario. In technical terms, we continue to draw the attention of traders to the most important levels and recommend trading from them: 1.3754, 1.3800, 1.3886, 1.3981. Senkou Span B (1.3859) and Kijun-sen (1.3901) lines can also be signal sources. It is recommended to set the Stop Loss level at breakeven when the price passes in the right direction by 20 points. The Ichimoku indicator lines can move during the day, which should be taken into account when looking for trading signals. No important events and reports in the UK on Wednesday, and an important inflation report will be released in the United States, the reaction to which can be strong as well as unpredictable.
We also recommend that you familiarize yourself with the forecast and trading signals for the EUR/USD pair.
COT report
The GBP/USD pair increased by 70 points during the last reporting week (July 27 – August 2). The latest Commitment of Traders (COT) report for this week showed that the net position for the "non-commercial" group of traders slightly increased. To be more precise, it is for 7,000 contracts, which is not so little for the British currency. The main thing is different, the essence of the COT report coincided with what is happening on the market for the pound/dollar pair. If you look at the chart above, it becomes clear that there is no question of any downward trend now. That is, the net position of professional traders has only been declining in the last month and a half, and as a result, the number of short positions has become even more than long ones. However, this has not (yet) led to a change in the global trend to a downward one. Moreover, the net position of non-commercial traders has been declining more often over the past few months, but the British currency has only slightly adjusted against the global upward trend. At the moment, as in the case of the euro currency, it cannot be concluded that the global upward trend, which has lasted for a year and a half, is over. We still believe that the euro and the pound can resume growth at any time. As for the future prospects of the pair, they remain as vague as possible if we analyze only COT reports. Recall that when the green and red lines of the first indicator approach, it means the end of the trend. Now they are as close as possible, which gives reason to assume that the process of completing the upward trend is completed. But since the price is still very high, it should rather be concluded that the pair has simply corrected and is now ready to resume the upward movement.
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.