GBP/USD 5M

The GBP/USD currency pair continued to ride a roller coaster on Tuesday. We have already talked earlier about the flat, which is clearly visible on the 4-hour TF. On the lower charts, it is expressed precisely by "swings". The movements are strong at first glance, but within the range of 1.3489-1.3637. The trade did not get out of the general picture of the state of things in any way. The British pound has been falling for most of the day (absolutely not correlating with the euro/dollar pair), and in the afternoon sharply, literally in an hour, it rose by 60 points (absolutely not correlating with the euro/dollar pair). It is noteworthy that the macroeconomic reports were only in the United States, so there can be no question of any reaction to statistics. As a result, we have the most unpredictable movements. Moreover, important levels and lines are ignored, which, in principle, is normal for a flat.

As for trading signals, it would have been better if they had not been there at all yesterday. First, the pair bounced off the area of the Senkou Span B, Kijun-sen lines and the 1.3572 level. After this buy signal, the price went up about 18 points, which was not enough to set the Stop Loss to breakeven. Then the price very strangely overcame the above-mentioned area and went down about 18 points, which again was not enough to set the Stop Loss to breakeven. Only the third buy signal about surpassing the same area could be profitable, but after two false signals, it was no longer necessary to open a deal. Thus, traders could have made a loss yesterday. However, we warned that the movement is now very difficult and inside the horizontal channel.

COT report

The latest Commitment of Traders (COT) report on the British pound showed an increase in bullish sentiment among professional traders. For the first time in several months, the number of long positions from the non-commercial group exceeded the number of short positions, so we can assume that the annual downward trend is over. In principle, the situation with COT reports on the pound is very similar to the situation on the euro. There, too, major players are increasing long positions, but at the same time the euro continues to be very close to its annual lows and in fact is not growing. But the pound, as we have repeatedly said, shows a smaller drop against the dollar and is growing more confidently. At the moment, it is at a much greater distance from its annual lows, so we believe that if there is a new fall, the pound will fall less than the euro. If there is a new growth, the pound will grow stronger than the euro. This is now explained by the fact that against the background of the planned multiple increases in the Federal Reserve's key rate in 2022, the European Central Bank simply refuses to raise its rate, and the Bank of England has already raised it twice. Thus, due to this discrepancy in the rates for tightening monetary policy, the pound occupies a more advantageous position in comparison with the euro currency. Moreover, non-commercial traders have just recently been bearish about the pound, which is eloquently shown by the green line of the first indicator or the second indicator in the chart above. However, it is over the past couple of months that their mood has become much more bullish.

We recommend to familiarize yourself with:

Overview of the EUR/USD pair. February 23. The "swing" continues. We are moving away from geopolitics, returning to the economy.

Overview of the GBP/USD pair. February 23. The pound is growing, but its growth potential is limited to the 35th level.

Forecast and trading signals for EUR/USD on February 23. Detailed analysis of the movement of the pair and trading transactions.

GBP/USD 1H

The technical picture on the hourly timeframe has not changed over the past day. It's still the same "swing", it's still the same horizontal channel. If you look at the higher timeframe, the flat is clearly visible. The price has been between the levels of 1.3489 and 1.3637 for several weeks. Although this channel is not the narrowest, nevertheless the price cannot leave it. Macroeconomic statistics are ignored at the moment, and it is unclear as to what the basis is for the pair's direction. We highlight the following important levels on February 23: 1.3439, 1.3489, 1.3537, 1.3572, 1.3637, 1.3667. The Senkou Span B (1.3564) and Kijun-sen (1.3590) lines can also be signal sources. Signals can be "bounces" and "breakthroughs" of these levels and lines. It is recommended to set the Stop Loss level to breakeven when the price passes in the right direction by 20 points. The lines of the Ichimoku indicator can move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels on the chart that can be used to take profits on transactions. Bank of England Governor Andrew Bailey and several of his colleagues are set to speak in the UK on Wednesday. Theoretically, given the BoE's mood to raise the rate, important information may sound. But how will the market react to it in the current circumstances? There are no interesting events planned for today in the United States.

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.