FX.co ★ Hot forecast and trading signals for the GBP/USD pair on August 14. COT report. Calm news in the UK unable to get the pound/dollar off the ground

GBP/USD 1H

The GBP/USD pair continued to trade inside the side channel on August 13, limited to the level of 1.3000 and 1.3169. Thus, the channel width for the pound is even less than for the euro. The resumption of the trend movement can be identified only when the price consolidates above or below the channel. Until then, traders can only trade between the borders of this channel at their own risk, since it is very inconvenient to trade in the flat, or wait for the completion of the sideways movement and the resumption of the trend.

GBP/USD 15M

Both linear regression channels turned up on the 15-minute timeframe, and change their direction of movement every day, which is absolutely normal for a flat. The latest Commitment of Traders (COT) report for the British pound, which was released last Friday, corresponded to what is happening now in the market. Two COT reports previously showed a decrease in the net position of non-commercial traders, which, in fact, means that the bullish mood is starting to weaken. It turned out that the most important category of traders, "non-commercial", reduced (roughly speaking) purchases of the British pound during the previous two weeks, but the UK currency became more expensive. However, the latest COT report finally showed an increase in the number of Buy-contracts for non-commercial traders, by almost 5,000. At the same time, they also closed Sell-contracts, which were reduced by 3,500. Thus, the total net position for this category increased by 8,500. The market situation has not changed during the current week, of which only data for Monday and Tuesday will be included in the next report, while the pound sterling has begun to significantly drop. Therefore, the new COT report is unlikely to show major changes in the mood of traders.

No fundamental background for the GBP/USD pair. Earlier, when traders regularly received news about the talks on a deal between London and Brussels, or about British Prime Minister Boris Johnson's intentions to complete the negotiations, his desire to complete the "transition period" in 2020, you could always expect the movement of the pound/dollar pair to be based on the fundamental background. Right now, Britain is completely calm, and provides no information. Important macroeconomic reports were published during the week, which not only failed to bring the pair out of the flat, but also did not cause much reaction from traders. Simply put, the markets ignored reports on GDP, unemployment, and industrial production. In addition, market participants are already fed up with the fundamental background from America. It is impossible to sell the dollar day after day based on the same news. Yes, the country is in crisis, in a serious crisis and not just one. However, the US dollar has already fallen by 8.5 cents against the pound since June 30, that is, for a month and a half. And during all this time, there was not a single noticeable pullback of the price down. Therefore, the bulls and bears are now simply at a standstill, which is displayed on the chart as a flat.

There are two main options for the development of events on August 14:

1) Buyers generally continue to hold the pound/dollar initiative in their hands. We recommend opening new purchases of the British currency, but not before breaking the 1.3169 level while aiming for the resistance level of 1.3275. In this case, the potential Take Profit is about 90 points. You can also try to buy the pound when consolidating above the Kijun-sen, but this signal will be weak.

2) Bears have already failed to overcome the support area of 1.3003-1.3023 five or six times. Therefore, if the price consolidates below the Kijun-sen line (1.3067), we can expect the price to fall in this area. Each trader will have to decide for himself whether to reject this signal or not, since the pair as a whole remains in a flat. We do not see the pair below the 1.3003 level yet, but if this level is overcome, we recommend opening sells with targets at 1.2956 and 1.2865.

Hot forecast and trading signals for the EUR/USD pair.

We recommend that you also explore the fundamental background in these articles:

Overview of the EUR/USD pair. August 14. US economy has contracted twice as much as the EU economy due to the pandemic. Trump loses his last advantage in front of voters.

Explanations for illustrations:

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 - 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 - trend lines, trend channels and any other technical patterns.