GBP/USD 5M
The GBP/USD pair has been trading in an unappealing manner over the past day. There was a swing movement during the European trading session. Well, at least in the US session a clear upward movement began with a buy signal starting to form. Thanks to this movement, we managed to open a profitable trade. But first things first. The first buy signal of the day was formed at the beginning of the European trading session - a rebound from the critical Kijun-sen line. The rebound was accurate, so traders had no reason to hesitate as to whether or not to enter a long position. However, the first approach to the upward movement was unsuccessful, the price went up more than 20 points, but eventually went back to the critical line. And so, this deal was closed at breakeven on the Stop Loss order, which we recommend placing after the price has passed 20 points in the desired direction. Further, a second rebound followed from the Kijun-sen line, much less accurate and unambiguous than the first. However, this is also a rebound and should be practiced as well. The new buy deal turned out to be more successful than the first one. The price has already reached the closest extreme level of 1.4181 during the US session, thereby making it possible for traders to earn about 59 points. An excellent result, which at the same time offsets 20 points of loss, which was obtained for the EUR/USD pair. A new signal was formed near the level of 1.4181, but it should not have been worked out, since it was formed in the evening. We do not recommend opening deals at night. As for the fundamental background, the only report of the day was the report on applications for unemployment benefits in the US, which had no effect on the course of trading.
GBP/USD 1H
The British pound resumed its upward movement on the hourly timeframe after a relatively small correction in the direction of the upward trend line. In general, the upward trend continues and has been present for a long period of time. In the near future, the price may return to its local highs (1.4219), and at the same time to 3-year highs (1.4240). Thus, the British currency continues to grow due to global factors, like the European currency. It is noteworthy that the correction for the pound is very weak, both globally and in the short term. We continue to draw your attention to the most important levels and lines and trade from them: 1.4080, 1.4181 and 1.4240. Senkou Span B (1.4010) and Kijun-sen (1.4133) lines can also be signal sources. 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. An important April retail sales report is due out in the UK on Friday. This figure is expected to rise by 4.5% on a monthly basis. It makes no sense to pay attention to the annual indicator, since it has a too small base (last April, retail sales collapsed downward). Also in Britain will be published indexes of business activity in the services and manufacturing sectors. Both are consistently above the 60.0 level, which is a very high value. Therefore, there is no need to fear for both of these indices. If there is no major discrepancy between the forecast and the actual value, then the market reaction is unlikely to follow the reports on business activity. In the afternoon - business activity in the US manufacturing and services sectors. The same thing, both indices are located well above the 50 level, as well as the 60 level, so there is no need to worry about business activity in the recovering economies.
We also recommend that you familiarize yourself with the forecast and trading signals for the EUR/USD pair.
COT report
The GBP/USD pair rose by 210 points during the last reporting week (May 4-10). Last Friday, traders got rid of the dollar because of the weak Nonfarm report, on Monday - by inertia. It was these two days that played the greatest role. Starting in January 2021, professional traders began to try to keep the main trend, since before that they constantly changed their strategy of working with the pound. The first indicator in the chart shows that the red and green lines began to move away from each other approximately in January, which indicates a new trend, which in our case is in fact the old trend of 2020. Nevertheless, the "non-commercial" group is currently raising its net position, increasing purchases of the pound, which look absolutely groundless from a fundamental point of view. But what if the pound is growing, and non-commercial traders are just aiming at making money from the exchange rate difference? During the reporting week, 15,000 Buy contracts and 6,000 Sell contracts were opened for the pound. Consequently, the net position increased by 9,000 contracts. The total number of open buy-positions is now 68,000, and Sell at 38,000. The difference is almost twofold, which indicates a moderate bullish mood of professional players. As in the case of the euro currency, we draw attention to the fact that at this time more global factors than the actions of large players, which usually set the direction of the trend, overlap the data of Commitment of Traders (COT) reports. However, COT reports now also speak in favor of continued growth in the British currency.
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.
