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GBP/USD 5M
The GBP/USD pair also continued to work out the results of the Federal Reserve meeting on Thursday. Thus, the downward movement was observed here, but it was much more "ragged". Constant rollbacks and corrections. In our fundamental reviews, we have already noted that the euro lost more from the Fed meeting than the pound, which is even a little strange, since it is the pound that is the more volatile currency. The quotes of the pound/dollar pair went down somehow reluctantly. Therefore, we have to remember the "speculative" factor. Nevertheless, the downward movement continued, and during the day there was no major event or publication in the UK or US. Thus, traders could only expect yesterday's movement to continue. The signals that formed during the day were much less accurate than for the EUR/USD pair. The only exception is the first sell signal, when the quotes accurately reached the extremum level of 1.4008 and rebounded from it. Here, of course, short positions should have been opened. Then the quote surpassed the extremum level of 1.3975, but a little later the price settled above it, which became a signal to manually close the short position, in profit of about 10 points. Unfortunately, the candlestick on which the rebound from the level of 1.4008 was formed turned out to be very large. But buying the pair from the level of 1.3975 should not have been absolutely correct. First, the fundamental background remained in favor of the dollar. Secondly, the candlestick, on which the pound settled above 1.3975, also turned out to be very large, that is, more than half of the distance to the nearest target has already been passed. But a little later, the level of 1.3975 was surpassed, which allowed traders to open new short positions. It was possible to take profit around the level of 1.3935, which the price worked out three times. Remember that the usual support levels are not sources of signals. Therefore, simply taking profit worth 25 points. In total, you could have earned about 35 points of profit yesterday.
Overview of the EUR/USD pair. June 18. The Fed made it clear that it will begin to tighten monetary policy, but the timing is still very vague.
Overview of the GBP/USD pair. June 18. A new scandal involving Boris Johnson and a sharp drop in the pound against the backdrop of the Fed meeting.
GBP/USD 1H
The overall decline over the last day is also much better seen on the hourly pound/dollar timeframe. However, the movement is still very "ragged" and "swing-like". For such a movement, it is extremely difficult to build at least a trend line. The US dollar is still strengthening, however, its further prospects are very doubtful here. In technical terms, we continue to draw your attention to the most important levels and recommend trading from them (especially since there are still no other benchmarks now): 1.3835, 1.3886, 1.3931, 1.3975 and 1.4008. These levels have not changed for a long time. Senkou Span B (1.4135) and Kijun-sen (1.4042) lines can also be sources of signals, but they are weak in the flat. 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. One noteworthy report from the UK is due on Friday. This is the retail sales report for May. They are expected to grow by 1.6% compared to April. Thus, any value above the forecast can provoke at least a slight strengthening of the British currency. In addition, we are waiting for a technical upward correction.
We also recommend that you familiarize yourself with the forecast and trading signals for the EUR/USD pair.
COT report
The GBP/USD pair fell by 25 points during the last reporting week (June 1-7). However, in general, no one doubts the direction of the global trend is upward, and the recent weeks' movement has been an absolute flat. The latest Commitment of Traders (COT) report showed that professional traders closed approximately the same number of Buy (longs) and Sell (shorts) contracts. It is this moment that very clearly indicates what is happening now with the pound/dollar pair. However, in general, the pound continues to grow and cannot even really correct. At the same time, the size of the net position of the major players practically does not change. Changes in the net position have been insignificant since the beginning of March, which is shown by both the first and second indicators. Moreover, the pound continues to show growth, it simply does not commensurate with the bullish sentiment of non-commercial traders. Thus, we continue to talk about such a global factor as the injection of trillions of dollars into the American economy, which, from our point of view, is the main reason why the pound strengthens. Look at the previous section of the trend between October 2020 and March 2021. The pound gained 1,400 points, while the net positions of commercial and non-commercial groups of traders remained practically unchanged. That is, large players did not increase their long positions at this time. At the same time, the pound grew by 1400 points practically without a single pullback.
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.
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