GBP/USD 5M
The GBP/USD pair traded in approximately the same way as the EUR/USD pair. Therefore, there were only two main movements during the day. It should be noted that it is very good when the pair does not change direction of movement every few hours. Movements like yesterday are the easiest to work with. The main thing is that at the same time important lines and levels are reached. For example, for the euro/dollar pair, this was not the case on Wednesday. But it was for the pound/dollar pair. The price steadily decreased to the Senkou Span B line and the support level of 1.4112 throughout the European trading session, afterwards it rebounded from them and formed the first signal of the day - to buy. Naturally, long positions should have been opened here with the Kijun-sen line as the target. The price reached the critical line after a couple of hours and bounced off it, so long positions should have been closed with around 35 points as profit. One should immediately open short positions on the signal of a rebound from the Kijun-sen line, but this signal already turned out to be false, therefore it did not bring profit and ended up with a loss of 14 points. After that, the movement stopped altogether and the quotes began to move mainly sideways, regularly breaking the critical line. The line itself slightly increased around this time, so the signals have already started to form a little higher. In any case, the situation changed from favorable to unfavorable and confusing, so it was no longer necessary to trade further from the critical line. Moreover, one false signal had already been generated by that time. No important macroeconomic reports were released in either the UK or the US on Wednesday. However, even if it did exist, it is far from the fact that the markets would work it out.
Overview of the EUR/USD pair. June 3. Calm, only calm. There is no reason to panic about inflation.
Overview of the GBP/USD pair. June 3. The Fed will wait for more significant progress before tightening monetary policy.
GBP/USD 1H
The British pound has reached the support level of 1.4112 on the hourly timeframe, which is the approximate lower border of the sideways channel 1.4100 - 1.4220. Therefore, the quotes remained within this channel and today it may aim for the upper border, that is, to the levels of 1.4219 and 1.4240. The price also bounced off the Kijun-sen line, therefore, for further upward movement, it needs to overcome it. We also remind you that quotes in flat conditions can move absolutely randomly. In general, the pound continues to gravitate towards growth, but the bulls need to surpass the area of 1.4219 - 1.4240 in order to do so. At this time, we continue to draw your attention to the most important levels and trade from them: 1.4080, 1.4101, 1.4219 and 1.4240. Senkou Span B (1.4154) and Kijun-sen (1.4177) lines can also be sources of signals, but they are very weak in a 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. On Thursday, the UK is scheduled to publish an index of business activity in the services sector, which will definitely be of passing to the markets, we also have a speech by Bank of England Governor Andrew Bailey, which will "pass" with a 90% probability. Nevertheless, we recommend paying attention to Bailey's speech. The United States should carefully consider the ADP Private Sector Worker Change Report and the ISM Services PMI.
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 10 points during the last reporting week (May 18-24). However, in general, the pound continues to rise in price, which is clearly visible on any long-term timeframe. Major market players continue to generally increase long positions, which provides an additional incentive to the British currency. The group of "non-commercial" traders (the most important group) opened only 936 Buy contracts (longs), but at the same time closed 4,700 Sell contracts (shorts) in the reporting week. And so the net position increased again, by more than 5,000 contracts, which means much more for the pound than for the euro. The mood of professional traders has again become a little more bullish, but in the medium term, it is absolutely impossible to say that large players are constantly increasing longs or closing shorts. The second indicator in the chart above, which shows the change in the net position for a group of "non-commercial" traders, shows that big players started to actively built up longs around February, but by mid-March their number began to decline, and has been approximately at the same level since the beginning of April. Thus, the pound continues to rise in price completely out of proportion to the bullish mood of non-commercial traders. Therefore, we continue to believe that the pair is much more influenced by the fact that hundreds of billions and trillions of dollars are infused into the US economy than the actions of major market players. However, most likely, the effect of these two factors is multiplied by each other, which leads to an even stronger result. In our case, the pound continues to grow when it should have fallen to the 30 figure, if the fundamental background from the UK was even slightly taken into account.
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.
