GBP/USD 5M
The GBP/USD pair moved in a very chaotic way on July 15, constantly changing the pace of movement and reversing very often. Nevertheless, yesterday the price worked out all key levels and lines quite accurately, so this time there are no complaints about the pound/dollar pair's movement. Unfortunately, such precision in working things out is a very rare occurrence. Usually, if a swing begins, then the pair moves randomly, absolutely not reacting to the macroeconomic background and fundamental events. In principle, this judgment is quite true for the last two trading days. During this time, the UK published reports on inflation, unemployment, wages and claims for unemployment benefits. Federal Reserve Chairman Jerome Powell gave two speeches, and reports on claims for unemployment benefits and industrial production were also published in the US. Looking at the chart below, can we say that these reports were worked out by the markets? Or: Has it become easier for traders to trade with so many macroeconomic statistics and other events? It hasn't become easier for sure. In Britain, the unemployment rate unexpectedly rose by 0.1% in May, but the number of applications for unemployment benefits decreased by 115,000 in June. Wages rose more than forecast. But in general, the package of reports can be called neutral. Now let's take a look at all the trading signals of the past day. First, the price bounced off the extremum level of 1.3859, forming a sell signal. It should have been worked out, and the downward movement stopped near the Senkou Span B and Kijun-sen lines. A rebound from these lines made it possible for us to close a short position and open a long one. The profit is about 20 points. The buy signal also worked out well. The price went beyond the level of 1.3859 and it reached the level of 1.3898, bringing about 62 more points of profit to traders. The rebound from the level of 1.3898 should also be worked out with a new short position. Subsequently, the price dropped to the level of 1.3859 again and initially bounced off it, so it was necessary to close the shorts in profit for another 19 points. Unfortunately, the buy signal from this level turned out to be false, as the price settled below 1.3859. Loss - 20 points. The next sell signal could no longer be worked out, since two reports were about to be released in America within half an hour. The following signals also should not have been worked out, since the time was already approaching the evening, and also Powell's speech in the US Congress began. The result of the day is about 80 points of profit.
Overview of the EUR/USD pair. July 16. The Fed will begin to really think about winding up QE no earlier than in 7-8 months.
Overview of the GBP/USD pair. July 16. The EU demands money from the UK. Davil Frost reiterates the ineffectiveness of the Northern Ireland Protocol.
GBP/USD 1H
The pound/dollar pair continues to move in a "swing" mode on the hourly timeframe, but recently the movement has also been very similar to a flat. So now you should trade only on the lower timeframe. There is still no trend line or channel on the hourly timeframe, and all the movements of the pair look very strange and chaotic. Overall, the pound/dollar pair is still the most confusing pair at this time. In technical terms, we continue to draw your attention to the most important levels and recommend trading from them: 1.3731, 1.3800, 1.3859 and 1.3898. Senkou Span B (1.3820) and Kijun-sen (1.3837) 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. There will be no important or interesting reports or events in the UK on Friday. One retail report will be released in America, and it might generate a pretty strong reaction.
We also recommend that you familiarize yourself with the forecast and trading signals for the EUR/USD pair.
COT report
The GBP/USD pair fell by 35 points during the last reporting week (June 29-July 5). However, Friday's upward gains in the British currency were not included in the latest published Commitment of Traders (COT) report. Thus, we cannot yet know if the mood of the major players has become more bullish over the past few trading days. As a reminder, COT reports are released with a three-day delay. However, even according to the latest published COT report, we can conclude that the group of "non-commercial" traders has become more bullish. Professional traders opened almost 5,000 buy contracts (longs) and almost 2,000 sell contracts (shorts) during the reporting week. Thus, the net position of this group of traders increased by 3,000 contracts. The total number of open purchase contracts also exceeds the number of sales contracts. Therefore, the British currency, according to COT reports, has an excellent chance of resuming the upward trend. Moreover, global technical and fundamental factors also speak in favor of this. The indicators are now showing complete uncertainty. On the one hand, the green and red lines (net positions of the "non-commercial" and "commercial" groups) are approaching each other, which indicates the end of the trend. On the other hand, when the pound was actively growing, these lines did not move away from each other, which suggests the presence of external important factors that affect the supply and demand of the dollar and the pound. The second indicator shows that the net position of professional traders has been declining since March, but their mood is still bullish.
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.
