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GBP/USD 5M
The GBP/USD pair moved and traded slightly better than EUR/USD on Thursday. If the euro just stood in one place all day, then the pound still showed a downward movement, which was provoked by macroeconomic statistics from Great Britain. Although this is a rather controversial point. In the chart above, the number "1" marks the time when reports on GDP and industrial production were published. As you can see, the pound did not immediately begin to fall, but only an hour after the price bounced off the Senkou Span B and Kijun-sen lines. Thus, we can even conclude that macroeconomic reports have nothing to do with it, and the downward movement was provoked by a technical signal. It should be noted that there were formal reasons for the pound 's decline. While the UK GDP report was completely neutral (4.8% q/q), the industrial production report was undoubtedly disappointing, being well below the forecast (-0.3% m/m). However, it is not very important for us whether it was a reaction to reports or just a movement after a strong sell signal was formed. There was only one signal during the day, so traders had the opportunity to open one deal. After the formation of the signal, the pair went down about 50 points, but could not reach the nearest target level of 1.3800. Therefore, the trade should have been manually closed in the middle of the US trading session for a profit of about 40 points. Considering that the total volatility of the day was about 60 points, this can be considered an excellent result.
Overview of the EUR/USD pair. August 13. The Fed is racing towards the end of the QE program.
Overview of the GBP/USD pair. August 13. British scientists: herd immunity against coronavirus is a myth.
GBP/USD 1H
The pound/dollar pair continues to be located within the descending channel on the hourly timeframe and this is almost the only positive moment in the pair's movement. At least the trend is clearly visible now. The pair failed to settle above the Senkou Span B line, so the downward movement may continue for some time. Recall that we expect a new, strong upward trend for both major pairs. However, before the quotes settle above the descending channel, a strong upward movement should not be expected. In technical terms, we continue to draw your attention to the most important levels and recommend trading from them: 1.3754, 1.3800, 1.3886, 1.3981. Senkou Span B (1.3874) and Kijun-sen (1.3865) 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. Completely calm news in the UK and the United States on Friday. No important reports or events set for the day. Thus, there will be nothing for traders to react to during the day. This means that there is a high probability of a flat and a weak movement. We can only believe that the situation will be like yesterday, and strong and clear technical signals will be generated that will make it possible to make good money.
We also recommend that you familiarize yourself with the forecast and trading signals for the EUR/USD pair.
COT report
The GBP/USD pair increased by 70 points during the last reporting week (July 27 – August 2). The latest Commitment of Traders (COT) report for this week showed that the net position for the "non-commercial" group of traders slightly increased. To be more precise, it is for 7,000 contracts, which is not so little for the British currency. The main thing is different, the essence of the COT report coincided with what is happening on the market for the pound/dollar pair. If you look at the chart above, it becomes clear that there is no question of any downward trend now. That is, the net position of professional traders has only been declining in the last month and a half, and as a result, the number of short positions has become even more than long ones. However, this has not (yet) led to a change in the global trend to a downward one. Moreover, the net position of non-commercial traders has been declining more often over the past few months, but the British currency has only slightly adjusted against the global upward trend. At the moment, as in the case of the euro currency, it cannot be concluded that the global upward trend, which has lasted for a year and a half, is over. We still believe that the euro and the pound can resume growth at any time. As for the future prospects of the pair, they remain as vague as possible if we analyze only COT reports. Recall that when the green and red lines of the first indicator approach, it means the end of the trend. Now they are as close as possible, which gives reason to assume that the process of completing the upward trend is completed. But since the price is still very high, it should rather be concluded that the pair has simply corrected and is now ready to resume the upward movement.
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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