GBP/USD 1H
The GBP/USD pair finally stopped completely baseless growth. Completely unfounded - if you look at the situation in the UK. Some experts believe that the pound's growth is connected in some way with the good rates of vaccination in Great Britain and with the drop in cases of the coronavirus. However, look at the US report. The number of daily recorded cases fell from 300,000 to 100. So this is not the reason. And there is no reason to look for reasons why the pound is strengthening. They can't be found in the UK. Technically speaking, traders have now managed to consolidate the pound/dollar pair below the upward trend line. So now we can count on a small correction at least. The pound has grown almost nonstop for a week. At least to the critical line, it should fall. Furthermore, everything will depend on whether the price overcomes this line or not. In our last review, we advised you to continue buying while aiming for the resistance level of 1.3876. However, the upward movement did not continue, so the deals had to be closed on the signal in order for the price to surpass the 1.3804 level. At the very least, traders could get a small profit on them. On the other hand, upon the signal of price taking below the trend line, you were advised to sell the pair. Due to the very low volatility of this signal, it has not yet been possible to earn. However, the pair may still drop to the Kijun-sen line during the day, which will bring a profit of 40 points. At the current level of volatility, this will also be a good result.
GBP/USD 15M
The lower linear regression channel has already turned to the downside on the 15-minute timeframe, signaling a correction. However, now everything will depend on the 1.3804 level, to which the price is barely approaching. If the bears fail to get the pair to settle below this level, then the downward movement will not continue. But we still count on continuing the correction, given the rise in the pair over the past week by 300 points.
COT report
The GBP/USD pair fell by 20 points during the last reporting week (January 26-February 1). Despite the fact that price changes were nearly non-existent in recent weeks, the uptrend continues to persist and is clearly visible. The pound continues to rise despite the fact that the latest reports do not unambiguously indicate a growth in interest for the British currency among professional traders. A paradoxical situation that is difficult to explain. The latest Commitment of Traders (COT) report revealed that the non-commercial group of traders opened 5,500 buy contracts (longs) and almost 5,500 sell contracts (shorts) during the reporting week. Thus, the net position for this group of traders has not changed, and the sentiment of the major players has not changed. Basically, this conclusion coincides with the scale of price changes over the reporting week. As for long-term prospects, there is still no clear and logical conclusion. The total number of open buy contracts for professional traders is still higher than that of the sell, but the advantage is not too large (55,000 versus 44,000). The indicators, which are designed to visualize changes in the mood of large traders, continue to show the absence of a "single party line". The mood of non-commercial traders is constantly changing, as indicated by the green line of the first indicator. The mood of commercial traders is also constantly changing, which is signaled by the red line of the first indicator. And in technical terms, it seems like the pound will collapse by 500 points tomorrow, but the fundamental background contradicts this hypothesis. An extremely confusing situation.
No major reports or events scheduled in the UK for Thursday. However, Bank of England Governor Andrew Bailey gave a speech a day earlier, which did not give the markets absolutely nothing. It's time to get used to the fact that from time to time the heads of central banks repeat approximately the same thing: the economy will recover long and hard, new incentives are required. From this perspective, the Bank of England is of the greatest interest, since it can lower rates in 2021. But from time to time Bailey abandons this idea, despite the rather weak economic recovery in recent quarters.
Nothing interesting in America on Friday, but the long-awaited GDP for the fourth quarter in the first estimate will be released in Britain. For a long time, forecasts indicated that the GDP would decline by 2%, but the first estimate could even be positive + 0.5% q/q. Nevertheless, the final estimate, which will be published on March 31, still speaks of a loss of 2%, so tomorrow's positive value should not be too happy.
We have two trading ideas for February 12:
1) The price began to correct. You are advised to open new long positions when the price rebounds from the 1.3804 level while aiming for the resistance level of 1.3876. Take Profit in this case will be up to 55 points. But given the low volatility, the pair can move in either direction slowly and with great difficulty, which can result in forming false signals. You can also consider opening longs with targets at 1.3804 and 1.3876, if there is a rebound from the Kijun-sen line (1.3767).
2) Sellers got a small chance of a slight decline. Since the trend line is broken, the price may go down to the 1.3804 level and the Kijun-sen line (1.3767). Take Profit in this case will be up to 50 points. However, although the probability of a correction is high, the movement is very weak. This should be taken into account.
Forecast and trading signals for EUR/USD
Explanations for illustrations:
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.
