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The GBP/USD currency pair continued to trade lower on Monday, but at the same time, volatility fell sharply compared to previous days, and the downward movement slowed down. Thus, while the pound still retains chances for the resumption of upward movement, as it continues to be located above the Senkou Span B line on the hourly timeframe. It also remains above the Kijun-sen line on the 24-hour timeframe. It is these two lines that still allow us to count on the resumption of the pound's growth. Unfortunately, these lines are opposed by the geopolitical and fundamental factors that have been pushing the pound down for a long time, so it is not clear why they would suddenly cease to exert their destructive influence on it. We believe that while the pound may continue to fall, and if such lines are overcome, then the fall will continue with 1.0357 as the target. Although the pound managed to grow significantly recently, traders are selling it again, which means that the global downward trend may continue this time.
The situation with trading signals for the pound is the same as for the euro. There was no signal on Monday. Thus, it was not necessary to open trading positions yesterday. In fairness, it should be noted that the downward movement, although it took place, was very weak and looked more like a flat. Therefore, in any case, trading on Monday would be extremely inconvenient and you could get more losses than profits.
The latest Commitment of Traders (COT) report on the British pound showed minimal changes. During the week, the non-commercial group closed 17,700 long positions and 14,600 short positions. Thus, the net position of non-commercial traders decreased by 3,100, which is not a lot for the pound. We could assume that the actions of major players and the movement of the pound have finally begun to coincide, but the pound has already begun a new round of decline, which risks transforming into a continuation of the global downward trend. The net position indicator has been growing slightly over the past weeks, but the mood of the big players remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth of the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 91,000 shorts and 42,000 longs open. The difference, as we see, is still very large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? We remain skeptical about the long-term growth of the British currency, although there are still certain technical reasons for this.
Overview of the EUR/USD pair. October 11. This has never happened - and here you are, again!
Overview of the GBP/USD pair. October 11. "Anti-British" sentiment continues to grow in Scotland.
Forecast and trading signals for EUR/USD on October 11. Detailed analysis of the movement of the pair and trading transactions.
The pound/dollar pair has already rolled back down by 470 points on the hourly timeframe, but at the same time it still retains theoretical chances for a resumption of the upward trend. Unfortunately, in the long term, the downward trend may well resume as geopolitics remain very complex. And the foundation - at least such that does not allow counting on the support of the British currency. Traders should now focus on geopolitics and Senkou Span B on the 4-hour timeframe and Kijun-sen on the 24-hour time frame. Overcoming them will increase the probability of a new fall of the pound to its absolute lows around the level of 1.3057. On October 11, we highlight the following important levels: 1.0538, 1.0930, 1.1212, 1.1354, 1.1442, 1.1649. Senkou Span B (1.0923) and Kijun-sen (1.1258) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. Data on wages, unemployment will be published in the UK, and in the evening there will be a speech by Bank of England Governor Andrew Bailey. We believe that Bailey's speech will be the most important event of the day, as the BoE may raise rates by more than 0.5% next month (according to rumors).
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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