GBP/USD 5M
The GBP/USD pair traded perfectly in the European trading session while it was in a "storm" mode in the US session on Tuesday, April 13. To begin with, quite important reports on GDP and industrial production were published in the UK in the morning. The time of their publication is marked with the number "1" on the chart. It cannot be said that traders reacted very fiercely to statistical information, and the reports themselves were ambiguous. For example, according to the results of the last three months, GDP decreased by 1.6% (against the forecast of -1.9%), and according to the results of the last one month, it grew by 0.4% (the forecast was + 0.5%). Industrial production grew by 1% instead of the expected + 0.5% in monthly terms. Thus, there was still a little more positive than negative and the pound received the market support it needed. However, it is more important that the first signal of the day - to buy - had already formed a little earlier.
Right at the opening of the European session, the price rebounded off the extremum level of 1.3724, and later it rose to the nearest Kijun-sen line (1.3767) and thus brought 35 points of profit. This was followed by a rebound from the Kijun-sen line that was perfect in terms of accuracy, which should also be regarded as a signal, but this time for a short position. The pair reached the closest level (1.3724), which brought traders another 34 points of profit. Afterwards, the pound/dollar pair began to fly in different directions when the US inflation report was released. It is because of such moments that we advise you to not trade or at lease be careful once important reports are published. Because such movements cannot be predicted or worked out. In general, everything calmed down a few hours later, near the same level of 1.3724, from which another rebound was even made, but we would not recommend working out any signals after what happened in the US session.
GBP/USD 1H
Everything looks much more dull and complicated at the same time on the hourly timeframe. On the one hand, the previous day's movements passed exactly above the 1.3724 level and below the 1.3773 level. On the other hand, now there is no trend line or channel for the pound/dollar pair, and in general it is difficult to understand what is happening and in what mood the markets are. Formally, the trend is downward, as earlier the bears managed to overcome the upward trend line. However, the downward movement has stopped recently, so you need to wait for new sell signals. So now, when there is no clear trend, it is even more important to trade from levels and lines. Signals will be generated when the pair rebounds or surpasses them. The most important levels today are 1.3677, 1.3724, 1.3773 and 1.3812. Senkou Span B (1.3811) and Kijun-sen (1.3754) lines are also important, and signals can also form around them. Rebounds or breakthroughs of these price values will be sources of signals. As before, you are advised to set the Stop Loss level at breakeven when the price passes 20 points in the right direction. The nearest level/line is always used as targets (exceptions - if the target is too close to the signal). No major events scheduled in the UK on Wednesday, so traders will have to focus on Federal Reserve Chairman Jerome Powell's speech. But the economic survey "Beige Book'' is unlikely to cause any reaction. This document is akin to the Fed minutes, which almost never makes the US dollar react.
We also recommend that you familiarize yourself with the forecast and trading signals for the EUR/USD pair.
COT report
The GBP/USD pair rose by 140 points during the last reporting week (March 30 - April 5). By the way, the charts shows how strong the downward correction has been in the last month and a half! And the entire upward trend doesn't even fit into the chart! The recent Commitment of Traders (COT) reports indicated that the sentiment of the non-commercial group of traders was becoming moderately more bearish. The second indicator shows a systematic decline in the net position of non-commercial traders. The green and red lines of the first indicator have been moving towards each other in recent weeks. However, we continue to pay attention to the fact that the green and red lines would change the direction of movement every couple of weeks before, which indicates that the most important groups of traders did not have a single trading strategy. But at the same time, the pound continued to grow. It turns out that the data from the COT reports simply did not coincide with what is happening in the currency market for the pound/dollar pair. Big players did not build up long or short positions, but the pound was still growing. From our point of view, the inflation factor of the money supply in the United States worked. The dollar was simply getting bigger. Therefore, the dollar's exchange rate fell, and large players could trade as they wanted, they simply did not exert the same strong influence on the pair's exchange rate as the US authorities, which poured trillions of dollars into the economy. We believe that we can see something similar this year, as the United States continues to saturate the economy with liquidity, and soon Americans could become more active, starting to get the money accumulated during the pandemic from under their pillows. Thus, the COT report for the pound does not allow any long-term conclusions to be drawn.
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.
