GBP/USD 5M
The GBP/USD pair also traded rather indistinctly on Wednesday, changing its direction of movement several times during the day. In addition, volatility was low again, although quotes passed almost 80 points during the day. But this was not enough to reach important levels and generate more signals. Macroeconomic statistics in the UK was also available yesterday, however, both PMIs fell compared to May (the time of release is marked with the number "1" in the chart). The pair's quotes fell by 23 points after these reports were released. Judge for yourself how much this movement can be considered a reaction. Now let's analyze the trading signals of the day. The pair's best movement probably happened during the first half of the European trading session. But, unfortunately, there was no signal preceding this movement. Thus, traders missed it. Further, the quotes reached the extremum level of 1.3975 and rebounded from it, allowing traders to open short positions. However, the price did not go down more than 15 points, after which it returned to the level of 1.3975 and overcame it, having already formed a buy signal. Thus, the short position closed at a loss of about 15 points. After the formation of a buy signal, the price also failed to continue its upward movement and even go through at least 20 points, which would have been enough to set Stop Loss to breakeven. Thus, this deal also closed at a loss, as the price settled below the level of 1.3975 a little later, forming another sell signal. However, one should not have opened short positions here, since by that time two false signals had already formed near the level of 1.3975. Thus, the day ended with a loss of about 30 points, which is not often the case.
Overview of the EUR/USD pair. June 24. Jerome Powell did not confirm the "bearish" expectations of traders.
Overview of the GBP/USD pair. June 24. Bank of England meeting: the day before. What to expect from members of the monetary committee?
GBP/USD 1H
An upward correction is clearly visible for the pound/dollar pair on the hourly timeframe, which is even supported by an upward trend line. In our fundamental articles, we drew attention to the fact that the pound can now very easily return to its three-year highs, or may fall to the level of 1.3670. The upward trend line is very useful in order to understand what is happening as well as to comprehend the current trend. One can continue to count on the pound's growth until the pair's quotes settle below it. In technical terms, we continue to draw your attention to the most important levels and recommend trading from them (note that some of them have been moved, some have been removed): 1.3800, 1.3886, 1.4008 and 1.4080. Senkou Span B (1.4042) and Kijun-sen (1.3895) 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. On Thursday, the results of the Bank of England meeting will be announced in the UK, so the pair's volatility may significantly grow in the morning. The direction of movement will entirely depend on the results that will be announced after the meeting and on the results of the vote by the monetary committee on the issue of changing the quantitative stimulus program. In addition, the United States will publish reports on GDP for the first quarter and orders for durable goods in the second half of the day, which may also slightly affect the rate of the pound/dollar pair, but hardly much.
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 70 points during the last reporting week (June 8-14). However, the new Commitment of Traders (COT) report was not released on Friday, so no special conclusions can be drawn on the current mood of the major players. It is necessary to wait for the new report, but it won't provide a complete picture of the state of affairs, since the last three trading days will not be included in it. But it was during these three days that the pound lost around 300 points, so it can be assumed that professional traders closed long positions and opened short ones. Consequently, the mood of traders could change and become less bullish. However, all of this will become known when the new COT report is published. So far we can say that in recent weeks nothing has changed much with the mood of the "non-commercial" group, which is the most important of all. This is not surprising, since the pair stood practically in one place for the entire month. We believe that global fundamentals will continue to have a negative impact on the US dollar, but this does not mean that the pound cannot fall in the short and medium term. As for the indicators, they also did not show any changes in recent weeks. In the first indicator, the green and red lines (net positions of groups of traders "non-commercial" and "commercial") continue to move sideways, and in the second indicator, the histogram has been at approximately the same level in recent weeks, which signals the absence of any or changes in the mood of professional players.
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.
