GBP/USD 5M
The GBP/USD pair was also trading quite calmly on Friday. But unlike the euro/dollar pair, which stood in one place throughout the European session, the British pound began to rise in the morning. We have said more than once that the pound has even more global factors in favor of its own growth than the euro. In practice, this hypothesis is confirmed. The most important thing is that a signal was formed for the pound on Friday, which made it possible to earn very good money. It was formed during the European session, so it could be opened without fear of important reports from overseas. Surpassing the extremum level 1.4101 enabled us to open long positions. The closest target was the Senkou Span B line, and by the beginning of the US session the price went up by about 30 points. Therefore, before important reports, it was possible to set Stop Loss to breakeven and not be afraid that the price would sharply turn down. As a result, the upward movement continued and the Senkou Span B and Kijun-sen lines were worked out. Therefore, you could earn around 50 to 65 points on this trade. You could keep the long positions open even longer, but this did not make much sense, since the end of both the trading day and the working week was approaching. In terms of macroeconomic reports, the UK published an index of business activity for the construction sector (figure "1" in the chart), but it provided only minimal support to the pound. All other reports and events were the same as for the EUR/USD pair. Thus, the pound very quickly made up for lost time on Thursday.
Overview of the EUR/USD pair. June 7. The ECB and Fed will begin to phase out their stimulus programs no earlier than 2022.
Overview of the GBP/USD pair. June 7. China and the United States are in conflict again.
GBP/USD 1H
The British pound returned to the level of 1.400 on the hourly timeframe, from which it began its decline on Thursday. At the moment, the quotes of the pair are right on the Senkou Span B and Kijun-sen lines, and there is still no sign of any trend. There is no way to form either a trend line or a channel. Thus, the British currency continues to be in the "swing" mode and within the flat. Therefore, it can move in any direction with equal probability on Monday-Tuesday. In technical terms, at this time, we continue to draw your attention to the most important levels and recommend trading from them: 1.4080, 1.4101, 1.4200 and 1.4219. Senkou Span B (1.4161) and Kijun-sen (1.4167) 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. There are no major events or reports scheduled in the UK or the US on Monday. As well as on Tuesday and Wednesday. Therefore, we believe that these days the flat will persist, and volatility may decrease.
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 55 points during the last reporting week (May 25-31). However, in general, no one doubts the direction of the current trend - upward. It was all the more surprising to watch the latest Commitment of Traders (COT) report, which showed that over the same time period, professional traders opened 500 buy contracts and 6,500 sell contracts. That is, the net position of the "non-commercial" group decreased by 6,000, which is a decent value for the pound. Thus, the picture is as follows. The pound continues to rise and cannot even really correct. At the same time, the size of the net position of the major players practically does not change. Since the beginning of March, changes in the net position have been insignificant, which is shown by both the first and second indicators. And in any case, these changes do not in any way reflect what is happening in the market itself. Moreover, the pound continues to show growth, simply not commensurate with the bullish sentiment of non-commercial traders. Anyway, any group of traders and all together. 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 for the strengthening of the British currency. Look, by the way, at the previous section of the trend, between October 2020 and March 2021. The pound gained 1400 points, while the net positions of commercial and non-commercial groups of traders remained practically unchanged. That is, large players did not increase their purchases at this time. At the same time, the pound showed an increase of 1400 points practically without a single pullback. As they say, the presence of third-party factors is obvious.
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.
