GBP/USD 5M
The GBP/USD pair continued a not too strong downward movement like the EUR/USD pair on Tuesday. True, if the movement for the euro/dollar pair is not only very weak, but also very inaccurate, then for the pound/dollar it was possible to form a trend line on the hourly timeframe, which now supports those who are trading downward. However, in general, both major pairs continue to decline, which is caused by the technical need for the second round of correction on the 24-hour timeframe. Thus, foundation and macroeconomics have nothing to do with it now. Moreover, there were no important events on Monday and Tuesday. As for the 5-minute timeframe, two sell signals were formed during the day, both near the extremum level of 1.3859. The first is a breakthrough, and the second is a rebound from it from below. One should open short positions when the first signal is forming, and during the formation of the second one, stay in them, since the price did not settle above the level of 1.3859, which could serve as a signal to manually close the shorts. However, at the same time, the quotes of the pair did not reach the level of 1.3800, which was the closest from below. Therefore, a short position should have been closed in the late afternoon at a profit of about 10-12 points. Not much, but better than a loss. The price changed the direction of movement several times during the day, and the volatility of the day was only 64 points, which is not much more than that of the euro.
GBP/USD 1H
A descending trend line has formed on the hourly timeframe for pound/dollar, which now indicates a downward trend. It is much easier to trade with this line, since now it is at least apparent that there is a clear trend. Since the price is below the Kijun-sen and Senkou Span B lines, the chances of continuing the downward movement are growing. In addition, on the 24-hour timeframe, we concluded that the downward movement may continue to the area of 1.3600-1.3666. In any case, until the price settles above the trend line, the downward trend continues. In technical terms, we continue to draw your attention to the most important levels and recommend trading from them: 1.3800, 1.3859, 1.4000. Senkou Span B (1.3960) and Kijun-sen (1.3907) 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. The UK will publish a report on GDP on Wednesday, which can provoke a reaction from the markets if the forecast value differs from the actual one. And it is forecasted in the first quarter -1.5% q/q. The ADP report on changes in the number of employees in the US private sector will also be released. It can also provoke a reaction from the markets, as it will reflect the current state of the labor market, which is now of great importance for the US economy and the Federal Reserve's prospects for changing monetary policy.
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 180 points during the last reporting week (June 15-21). We have already said in previous articles that it is necessary to wait for this new Commitment of Traders (COT) report, which reflects the behavior of market participants for the period June 16-18, when the markets showed strong volatility due to the summing up of the Fed meeting. And from the latest COT report, you can really draw some conclusions. A group of non-commercial traders closed about 7,000 buy contracts (longs) and opened 10,000 sell contracts (shorts) during the reporting week. Thus, the net position decreased by 17,000 contracts at once. Considering that at the moment there are about 100 thousand contracts open by major players, 17,000 is a lot and shows serious changes in the mood, which has become much less bullish. Nevertheless, it still remains bullish, as the total number of open buy contracts from the non-commercial group remains 1.5 times greater than the number of sell contracts. However, the difference is not as strong as in the case of the European currency. On the other hand, professional pound traders did not buy the currency at breakneck speed in the last year. This is clearly seen in both indicators in the chart. The first indicator shows that the net position of non-commercial traders (green line) rose to only 40,000, and during the penultimate, strong upward movement, it did not increase very much. The second indicator also clearly shows that large players did not build up their buy positions en masse. It was on the basis of these data that we concluded that global fundamental factors are in the first place, for example, the injection of trillions of dollars into the American economy, which led to the fall of the dollar and, accordingly, the growth of the British currency.
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.
