GBP/USD 5M
The GBP/USD pair moved in about the same way as the EUR/USD pair on August 26. Although, if we take into account that the volatility for both major currencies remains low, then there is nothing surprising in this. No major reports were released in the UK on Thursday. And the US GDP report provoked a slight strengthening of the dollar. So low that it is unclear whether this was generally a market reaction to the report, or was the price just moving in this direction at that time? One way or another, but the pound/dollar pair from the high to the low of the day passed about 60 points, which is about the same as for the euro/dollar pair 40 points. Now let's look at trading signals. There were three of them during the day, and all of them were formed near the same extreme level 1.3747, which is located near the Senkou Span B line (1.3745). First, the price surpassed both of these lines from top to bottom, thus forming a sell signal. Traders should have taken short positions at this point. Then the price returned to the level of 1.3747 twice and bounced off it, forming new sell signals. However, since the price never settled above the level of 1.3747, the short positions should not have been closed and it had to remain open all the time until the evening, since it could not be closed by Stop Loss either. As a result, in the late afternoon, the profit on it was about 25 points and it had to be manually closed. Thus, yesterday we even managed to get a small profit, although the movements again left much to be desired.
Overview of the EUR/USD pair. 27 August. Jackson Hole Symposium: "There will be no kin, electricity run out"
Overview of the GBP/USD pair. 27 August. Great Britain, America and the coronavirus
GBP/USD 1H
The pound/dollar pair is trying to continue the upward movement after settling above the downward channel on the hourly timeframe, but it does not succeed. In the past few days, there has been no upward movement as such. Even a trend line or channel is now impossible to build. Therefore, we can only hope that the pair will continue its upward movement, which looks more logical than a new fall. However, the technical picture may undergo serious changes today, since the event that markets have been waiting for from the very beginning of the week will take place today. It is impossible to predict the outcome of this event, so the main thing is to be extremely careful with any positions. We continue to draw the attention of traders to the most important levels and recommend trading from them: 1.3601, 1.3677, 1.3747, 1.3785 - 1.3794. Senkou Span B (1.3745) and Kijun-sen (1.3684) 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 UK's fundamental calendar is completely empty on Friday, 27 August. On the other hand, Federal Reserve Chairman Jerome Powell's speech will take place in the US, which may cause a serious reaction from the market. Moreover, the movement may begin even before the start of the speech, since many traders may try to play ahead of the curve. In any case, more active movements are expected today than this week's average.
We also recommend that you familiarize yourself with the forecast and trading signals for the EUR/USD pair.
COT report
The GBP/USD pair did not lose or gain a single point during the last reporting week (August 10-16). Moreover, if you look at the chart above, you can clearly see that there is no downward trend at this time. There is a correction, and the correction ends sooner or later. According to the latest Commitment of Traders (COT) reports, the major players were not very active, but still reduced their net position (green line of the first indicator). And commercial traders, on the contrary, increased it. This suggests that the upward trend is coming to an end, but at the same time, the data of the COT reports for the pound is very inaccurate, since at the time when the pound grew by those 2,800 points, which we have already mentioned, professional traders did not always increase long positions. It was on the basis of this fact that we concluded that the factor of the Federal Reserve's infusion of trillions of dollars into the US economy has a greater influence on the British currency exchange rate, which inflates the money supply and provokes inflation. Moreover, in the last few weeks, the group of non-commercial traders has been increasing buy contracts/longs (the green line rises, the second indicator rises). Thus, the bullish sentiment among the major players is strengthening again. Consequently, the pound may start to rise in price again. Changes were minimal during the reporting week. In total, professional traders have closed 2,700 buy contracts and less than 500 sell contracts. Thus, the net position decreased by 2,500. However, such changes are insignificant for the British currency. In general, now between the purchases and sales of the pound at "non-commercial" is almost complete equilibrium.
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.