GBP/USD 5M
The GBP/USD pair was trading much more actively than the EUR/USD pair on Monday, April 12. And unlike the euro/dollar pair, several signals were generated here that could and should have been worked out. Take note that we did not receive any important report. And so, nothing prevented traders from trading exclusively in accordance with technical analysis. And in accordance with the technical analysis, the following picture was obtained. Trading opened on Monday approximately where it closed on Friday. The pair was surprisingly trading in a vigorous manner during the Asian session, but we do not recommend tracking signals at night, as there is often a flat. A buy signal was immediately generated with the opening of the European trading session. The signal, frankly speaking, is "borderline". That is, it was not immediately possible to understand what happened near the 1.3677 level , rebound or breakthrough. However, during several candles it became clear that it was still a rebound, therefore, since the level was an extreme one, long positions should have been opened. The nearest target - the extremum level of 1.3724 was reached without any problems, and traders could earn around 36 points on this signal. This level was subsequently surpassed, which allowed traders to open new buy orders. However, unfortunately, it was not possible to earn money on a new buy trade, although the price went up after this signal appeared for another 40 points. Unfortunately, the bulls failed to reach the Senkou Span B line (1.3791), therefore, it was not possible to take this profit. As a result, the deal could be closed at minimum profit or by Stop Loss at breakeven. You should have done nothing around the 1.3737 level, as it was too close to 1.3724. Also, we are not looking for signals near it, since this is not an extremum level.
GBP/USD 1H
Everything looks less appealing on the hourly timeframe, although rebounds from important levels are noticeable here as well. Two rebounds from the 1.3677 level are immediately evident. Recall that the downward trend persists on the hourly timeframe, because the price had previously crossed the upward trend line. Unfortunately, there is no trend line or downward trend channel as the movement is very volatile. The bears failed to surpass the 1.3677 level twice, which increases the likelihood of an upward movement. But the bulls also failed to settle above the Kijun-sen line, so there is a high probability of returning to the extremum level of 1.3677. In general, now, more than ever, it is important to trade from levels and lines. Signals will be generated when rebounding from them and surpassing them. The most important levels today are 1.3677, 1.3724 and 1.3812. Senkou Span B (1.3791) and Kijun-sen (1.3767) lines are also important, and signals can also form around them. Signals can be rebounds and once levels and lines are surpassed. 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). On Tuesday, in addition to the most important report on inflation in the US, the UK will publish an equally important report on GDP for February and a report on industrial production for the same month. These reports can also significantly influence the course of trading. You should be careful once these reports are released.
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.
