GBP/USD 5M
The GBP/USD pair was trading with low volatility on Tuesday. This indicator did not exceed 50 points, which is very little for the pound. Moreover, there was an open flat during the day. In the article on the euro/dollar pair, we drew the attention of traders to the fact that with low volatility, two scenarios are possible in terms of signal generation. It was the first option for the euro, and, unfortunately, it was the second for the pound. Five signals were formed at once during the day, and everything was near the extremum level of 1.3677, which is losing its relevance from today. Needless to say, all these signals turned out to be false? However, let's take a look at them and figure out how the pair should have been traded yesterday. The first signal in the form of a rebound from the level of 1.3677 turned out to be false. Traders could open short positions here, but almost immediately the price returned to the level of 1.3677, bounced off it again, and overcame it on the third attempt. Thus, a loss of 16 points was recorded on a short position. In principle, all subsequent signals could no longer be worked out, since by that time it was already clear that the pair was moving with low volatility, and two false signals had already been generated near the level of 1.3677. As you can see, all subsequent signals also turned out to be false, since the pair was trading very sluggish all day.
Overview of the EUR/USD pair. September 22. Day X has arrived for the US dollar.
Overview of the GBP/USD pair. September 22. Nancy Pelosi: There will be no trade agreement between the UK and the US.
GBP/USD 1H
The GBP/USD pair continues to move down as a whole on the hourly timeframe, however, volatility has decreased again. Nevertheless, the US dollar continues to rise in price as a whole on the eve of two meetings of central banks. At least traders did not even try to settle above the downward trend line. Recall that we are still counting on the resumption of the global upward trend, and the price is now located near the area where an upward reversal is possible. This area is 1.3600-1.3666. However, a lot will now depend on the markets' reaction to the meetings of the Federal Reserve and the Bank of England. We also continue to draw the attention of traders to the most important levels: 1.3570, 1.3601, 1.3640, 1.3732, 1.3785 - 1.3794. Senkou Span B (1.3818) and Kijun-sen (1.3747) 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. No major publications or major events scheduled for Wednesday, September 22 in the UK. However, in the United States, the results of the Fed meeting will be summed up late in the evening. As already mentioned, this event is very important and it is unlikely that the meeting will be a "walk-through". This means that traders have the right to expect strong movements during the day. If the Fed decides to start curtailing the QE program, this may cause a strengthening of the dollar, but one must be prepared for the option in which the pair will begin to grow, since this decision may already be taken into account in the current rate of the pair.
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 gain or lose a single point during the last reporting week (September 7-13). Recall that in recent weeks, according to Commitment of Traders (COT) reports, the mood of the major players has changed to bearish. The green line of the first indicator in the chart above (denotes a change in the net position of the "non-commercial" group) has dropped below zero. This was until the last COT report, which came out on Friday, September 17th. At that time, we already questioned the continuation of the British currency's decline. Simply because the pound, like the euro, has been correcting for more than six months against the global upward trend. And during this time, it managed to correct by 23.6%. This is very small and certainly does not look like a new downward trend is forming. And the latest COT report did show that any expectations of further dollar growth may be premature. Despite the fact that at the end of the week the dollar rose against both the pound and the euro, during the reporting week, major players immediately opened 15,000 buy contracts (longs) and closed the same number of sell contracts (shorts). That is, the net position for the "non-commercial" group of traders has grown by 30,000 at once. Considering that until the last COT report, only 30,000 buy contracts (longs) were opened for commercial traders, such changes are global. Thus, in the case of the pound, the chances of a further fall are much less than with the euro. Moreover, both the pound and the euro have corrected against the upward trend by 600 points. But it is less than 23% for the pound, and it is about a third for the euro.
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.