GBP/USD 5M
The GBP/USD pair was trading even worse than the EUR/USD pair on Wednesday, although it would seem that this will be difficult to achieve. Look and compare the movements of both pairs - they are completely different. Consequently, at this time there is an uncorrelation between them, which is always strange. There was not a single important fundamental event in the UK yesterday, as in the US. Thus, traders had nothing to pay attention to and nothing to react to during the day. Nevertheless, there were sharp outbursts of emotions in the market, and almost flat movement, and trend segments. The first two signals were generated during the European trading session, when the pair first crossed the extremum level of 1.3246, and then bounced off it from below. Thus, traders had to work out these signals with short positions. As a result, the quotes fell to the extreme level of 1.3186 and went much lower, reaching the support level 1.3162, from which there was a rebound. This rebound should have been used to close short positions. The profit was 49 points. Further, the pair formed several shockingly imprecise buy signals at once near the 1.3186 .3193 area. The price bounced off it four times and the very first buy signal should not have been worked out, since at the time of its formation the pair had already gone up about 50 points in just ten minutes. But the next rebound from the indicated area should have already been worked out, since it turned out to be much more "calm". After it was formed and until the next two buy signals were formed, the price did not go up 20 points, so Stop Loss was not set to breakeven. As a result, the pair still showed a good upward movement and the long position should have been closed manually in the late afternoon with a profit of about 25 points. Thus, it was possible to earn about 75 points of profit on a rather complex movement, which completely covered the losses on the EUR/USD pair.
GBP/USD 1H
On the hourly timeframe, the pound/dollar pair maintains a downward trend, as it is still located within the downward channel, from the upper border of which it has rebounded seven times in just the last ten days. Each subsequent bounce only increases the probability of the final overcoming of this line. Moreover, the euro/dollar pair broke the downward trend and the pound could follow it. We distinguish the following important levels on December 9: 1.3186 - 1.3193, 1.3246, 1.3288, 1.3362, 1.3406. Senkou Span B (1.3301) and Kijun-sen (1.3247) lines can also be signal sources. Signals can be "rebound" and "breakthroughs" of these levels and lines. 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. There will again be no major report, no major event in the UK on Thursday. Just like in the US. However, both major pairs have shown rather high volatility in recent days, so today the movements can be quite strong as well.
We recommend you to familiarize yourself:
Overview of the EUR/USD pair. December 9. ECB Vice President: High inflation will persist longer than expected.
Overview of the GBP/USD pair. December 9. The House of Representatives approved an increase in the US national debt limit. The next step is the Senate.
Forecast and trading signals for EUR/USD for December 9. Detailed analysis of the movement of the pair and trade deals.
COT report
The mood of professional traders became a little more bearish during the last reporting week (November 23-29). In principle, quite unexpectedly, the bears became almost twice as strong as the bulls. Recall that since about August, the bulls and bears could not decide who to dominate the market. This is clearly seen by the two indicators in the chart above: the net position of the "non-commercial" group was constantly jumping from side to side. However, in the last few weeks, professional traders have increased the number of shorts to 93,000, and the number of longs has remained at 51,000. Thus, at this time, the mood can really be described as bearish. Consequently, it can be concluded that the pound will continue to fall. However, as always, it does not do without one "but". The red and green lines of the first indicator, which indicate the net positions of commercial and non-commercial traders, the two most important and large groups, have moved quite far from each other. They were at about the same distance in May-June, when the upward trend ended. And a strong distance from each other of these two lines just means that the trend may end. Of course, if the demand for the dollar does not decline, and there is still the same negative fundamental background in the UK, then nothing will prevent the US currency from continuing to grow. However, a further fall in the pound will mean that the number of shorts will continue to grow. And it already exceeds the number of longs by almost twice.
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.