GBP/USD 5M

The GBP/USD currency pair traded almost identically to the EUR/USD pair on Wednesday. However, there were also some differences. The key difference was the statement of representatives of the Bank of England, which for obvious reasons had nothing to do with the euro, that emergency measures would be taken to stabilize the financial situation. In particular, we are talking about buying up long-term government bonds in unlimited volumes. After that, the pound has already shown multidirectional movements with a total of about 300 points. In the afternoon, the pound started to sharply rise (by the same 300 points), which could have been provoked by Federal Reserve Chairman Jerome Powell's speech. However, we don't believe this because do you remember the last time Powell provoked a 300 point move? Thus, the conclusions can be the same: we saw a new round of an upward correction with the continuation of the downward trend, as evidenced by the price being below the Kijun-sen and Senkou Span B lines, as well as the downtrend line. However, we are ready to admit that over the past few days, the pound has made a good leap upwards, which may be the beginning of a new upward trend.

No trading signals were formed on Wednesday, as there are still very few levels in the current price area. Thus, once again a very volatile movement was missed, but we all see perfectly well that the market is now in a state close to panic. The pound may rise by 300 points today, and fall by 500 tomorrow. You should be very careful.

COT report:

The latest Commitment of Traders (COT) report on the British pound was again very eloquent. During the week, the non-commercial group closed 11,600 long positions and opened 6,000 short positions. Thus, the net position of non-commercial traders decreased by another 17,600, which is a lot for the pound. The net position indicator has been growing for several months, but the mood of the big players still remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). And now it has begun a new decline, so the British pound still cannot count on a strong growth. How can you count on it if the market sells the pound more than it buys? And now its decline has completely resumed and multi-year lows are updated almost every day, so the bearish mood of major players can only intensify in the near future. The non-commercial group now has a total of 109,000 shorts and 41,000 longs open. The difference is again almost threefold. The net position will have to show growth for a long time to at least equalize these figures. Moreover, one should not forget about the high demand for the US dollar, which also plays a role in the fall of the pound/dollar pair.

We recommend to familiarize yourself with:

Overview of the EUR/USD pair. September 29. The euro is falling down ahead of September 30 and amid the general geopolitical background.

Overview of the GBP/USD pair. September 29. Theater of the absurd with Nord Stream.

Forecast and trading signals for EUR/USD on September 29. Detailed analysis of the movement of the pair and trading transactions.

GBP/USD 1H

The pound/dollar pair can still maintain the current downward trend on the hourly timeframe, although everything comes to an end sooner or later. We believe that the pound may now start an upward trend, however, this requires at least overcoming the lines of the Ichimoku indicator and consolidating above them for a long period of time, and not for a couple of days. Fundamental and macroeconomic backgrounds now play almost no role. Geopolitics comes first. If there is new negative news, the pound and the euro may resume falling. We highlight the following important levels on September 29: 1.0357, 1.0538, 1.0930, 1.1212, 1.1354, 1.1442. Senkou Span B (1.0972) and Kijun-sen (1.0858) 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. There are no important macroeconomic reports scheduled for Thursday in the UK and the US, but there will be several speeches by members of the Fed's Monetary Committee, as well as several minor reports in the US. Theoretically, there may be a reaction, but if the pound has now begun an upward trend, then its growth will continue without the support of the "foundation".

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.