GBP/USD 5M

The GBP/USD currency pair also resumed its downward movement on Wednesday and confidently broke through its 37-year lows, updating them. As in the case of the euro, the news about the mobilization in Russia turned out to be decisive, which automatically means a future new round of escalation of the conflict in Ukraine. Naturally, the risky currencies, which include the euro and the pound, immediately fell, without even waiting for the results of the Federal Reserve meeting. Now the pound may fall due to geopolitics, as well as due to the two meetings of the central banks and the decisions that will be made at them. If a few weeks ago we were already ready for the downward trend to end, now we would say that the pound can fall as low as you like. We are not considering the results of the Fed meeting now, as it is necessary that the market fully work them out and take them into account. As we have already said, it is not the results themselves that are important for traders, but how the market reacts to them, how it interprets them.

There were only two trading signals on Wednesday. First, the pair overcame the level of 1.1354, and then rebounded from it from below. At that time there was not a single target below the level of 1.1354, so in any case, short positions should be expected to be closed manually. The first position could be closed by Stop Loss at breakeven, the second – at a profit of about 30 points. The result is not bad, since the price was in an open flat during most of the European and US trading sessions.

COT report:

The latest Commitment of Traders (COT) report on the British pound was again very eloquent. During the week, the non-commercial group closed 11,600 long positions and opened 6,000 shorts. Thus, the net position of non-commercial traders decreased by another 17,600, which is a lot for the pound. The net position indicator has been growing for several months, but the mood of the big players still remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). And now it has begun a new fall, so the British pound still cannot count on a strong growth. How can you count on it if the market sells the pound more than it buys? And now its decline has completely resumed and multi-year lows are updated almost every day, so the bearish mood of major players in the near future can only intensify. The non-commercial group now has a total of 109,000 shorts and 41,000 longs open. The difference is again almost threefold. The net position will have to show growth for a long time to at least equalize these figures. Moreover, one should not forget about the high demand for the US dollar, which also plays a role in the fall of the pound/dollar pair.

We recommend to familiarize yourself with:

Overview of the EUR/USD pair. September 22. Lagarde speech: "water" on "water".

Overview of the GBP/USD pair. September 22. New geopolitical tensions in Ukraine, partial mobilization in Russia.

Forecast and trading signals for EUR/USD on September 22. Detailed analysis of the movement of the pair and trading transactions.

GBP/USD 1H

The pound/dollar pair only spent a couple of days in a formal flat on the hourly timeframe. Now it can resume the fall, because geopolitics has deteriorated significantly in its prospects. Although lately the pound clearly did not need a reason to continue falling. The fundamental background these days will be extremely strong and important, so the pair can thoroughly "fly" from side to side. We highlight the following important levels on September 22: 1.1354, 1.1442, 1.1649, 1.1760, 1.1874. Senkou Span B (1.1543) and Kijun-sen (1.1410) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. The results of the Bank of England meeting will be summed up in the UK on Thursday, which is important in itself. However, in addition to the market reaction to this event, traders can continue to work out the results of the Fed meeting, which ended last night. That is, two major events can intersect in the market reaction to them. And we can get ultra-volatile trades during the day. Thus, being cautious when opening any trading positions today is first and foremost.

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.