GBP/USD 5M
The pound/dollar pair was trading very badly again on September 15. The volatility of the pair was just over 60 points yesterday, which is very little for it. Thus, trading actively and profitably failed again. There were few macroeconomic reports yesterday, but they were quite important. A report on inflation was published in the UK, which unexpectedly for many showed an acceleration in price growth to 3.2% in annual terms. After the publication of this report, the quotes of the British currency increased by 20 points (figure "1" in the chart). A report on industrial production was published in the US in the afternoon, which showed no deviations from the forecast value. Therefore, the movement that began after the publication (number "2" in the illustration) can hardly be associated with the report itself. This is most likely just a coincidence. In general, the pound/dollar pair managed to settle above both key lines of the Ichimoku indicator, but at the same time it could not continue to move up. During the day, there were only two signals that deserved attention. The first is overcoming the Senkou Span B line at the very beginning of the European session. The second - literally in half an hour, overcoming the Kijun-sen line. It was necessary to open long positions on these signals, but the upward movement, as already mentioned, did not continue. However, the signals themselves were not canceled, as the price failed to settle below the critical line. The pair returned to it three times and bounced off it thrice. Thus, traders were in long positions until the evening, which had to be manually closed in the end. As in the case of the euro/dollar pair, the profit turned out to be small, only 15-20 points.
Overview of the EUR/USD pair. September 16. The market is baffled by the decline in US inflation.
Overview of the GBP/USD pair. September 16. London threatens Brussels to withdraw from the Northern Ireland Protocol.
GBP/USD 1H
The GBP/USD pair continues to trade mainly between the levels of 1.3732 and 1.3886 on the hourly timeframe. This is, of course, not a horizontal channel, but still the pair is stuck without a definite trend in a limited range. For the second time in recent years, the price has overcome an upward formation (channel or trend line), but at the same time it cannot start moving down. Yesterday, quotes bounced off the level of 1.3794 and tried to start a new round of movement to the upside, but at the same time, low volatility did not allow the price to go far from the opening levels of the day. We continue to draw the attention of traders to the most important levels: 1.3732, 1.3785 - 1.3794, 1.3886, 1.3948. Senkou Span B (1.3784) and Kijun-sen (1.3833) lines can also be signal sources. 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. No major events and publications are scheduled in the UK on Thursday, September 16, and in America it will be possible to only pay attention to the retail sales report, which also may not provoke any reaction. Thus, with a high degree of probability the nature of the pound/dollar pair's movement will not change today.
We also recommend that you familiarize yourself with the forecast and trading signals for the EUR/USD pair.
COT report
The GBP/USD pair gained 80 points during the last reporting week (August 31 - September 6). The most important group of non-commercial traders continues to decrease their net position, and their mood is becoming increasingly bearish. These changes are clearly visible on the indicators in the chart above. The first indicator clearly shows that the green line (the net position of the "non-commercial" group) has already gone below the zero level and continues to decline. Simply put, the mood of the major players has already changed to bearish and is now only getting stronger. However, we still cannot conclude that the upward trend is over due to the too weak correction against this trend (recall: only 23.6%). It is the weakness of the correction over the past six months that does not allow us to conclude that a new downward trend has begun to form, and not just a correction. Thus, the major players continue to sell off the pound, while the currency itself, after three attempts, could not even go below the target area of 1.3600-1.3666. Therefore, we believe that in the first place in terms of importance is the factor of infusion of hundreds of billions of dollars into the US economy by the Federal Reserve, which ensures the depreciation of the dollar in the long run and does not allow it to strengthen too much in the short term. During the reporting week, non-commercial traders closed 5.5 thousand buy contracts (longs) and opened 2.5 thousand sell contracts (shorts). But despite the fact that the major players are bearish, this does not help the pound/dollar pair to continue moving below 1.3600.
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.
