GBP/USD 5M

The GBP/USD pair also began a round of downward correction on Tuesday, April 20. Traffic was generally rather weak. During the day, the pair passed from a maximum to a minimum of no more than 70-80 points. This is not a lot for the pound, although in principle it is not small. The most important thing is that a relatively working signal was formed during the day, which could be worked out. However, before analyzing it, you should pay attention to the horizontal channel, which was formed during the Asian and European sessions. The price stayed in it for quite a long time, and in the middle of this channel, the extreme level 1.3998 was just passing. Therefore, while the pair was in the flat all this time, traders had to guess whether there would be a rebound from this level or a breakthrough. Fortunately, the flat started at night and was visible in the morning. Therefore, it was possible to identify it at the very beginning of the European session. Short positions should have been opened when the price settled below the rectangle indicating a flat. The support level of 1.3952 was the nearest target. Traders eventually reached it, so it brought a profit of about 28 points. Marginal, but still better than nothing, and better than the EUR/USD results. Since the 1.3952 level is not an extreme, no buy or sell signals were formed around it. Therefore, the morning signal was the only one during the day. Take note that several macroeconomic reports were published at the very beginning of the European session in the UK, which, however, had no effect on the course of trading. Although they could have done it. The fact is that the unemployment rate in the UK fell from 5% to 4.9%, and the number of new applications for unemployment benefits turned out to be well below forecasts. Wages rose in line with the forecast. But, as we said, there was no reaction.

GBP/USD 1H

The technical picture on the hourly timeframe does not require any explanation. The upward movement ended near the 40th level, we moved the nearest extreme level to yesterday's high. After that, a downward correction began for both the euro and the pound. Synchronously. Therefore, everything is going according to plan, and the pound, after a slight correction, may resume its upward movement. Unfortunately, the pound raises the most questions, because if you look at the 4-hour timeframe, you can see that this pair can now move in a "swing" mode. That is, after going up about 300 points, it may collapse by the same amount. We do not expect such a scenario for the euro just yet, but it is quite real for the pound. Therefore, trading from levels and lines remains a very important aspect. Signals will be generated when the pair rebounds from them or breakthroughs are achieved. The most important levels today are 1.4080, 1.4008 and 1.3914. Senkou Span B (1.3794) and Kijun-sen (1.3861) lines are also important, and signals can also form around them. 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). Inflation for March is scheduled to be published in the UK on Wednesday, April 21st, but considering how the markets reacted to the reports from Britain on Tuesday, it is likely that they will not react to the inflation report, unless the actual value is very different from the forecast.

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 160 points during the last reporting week (April 6-12). The chart clearly shows how strong the current downward correction is! Recall that professional traders have been actively reducing both buy and sell orders over the past 6-8 weeks. On February 23, around 69,000 were opened for the first and around 34,000 for the latter, then as of April 6, 44,000 Buy-contracts (longs) were opened, and 25,700 for Sell (shorts). Thus, in general, the ratio between longs and shorts has not changed. Only the number of contracts that were opened by the non-commercial group has changed. Hence the conclusion: the bullish mood persists among professional traders, but in general, fewer and fewer speculators want to deal with the "unbalanced" pound. Basically, the behavior of non-commercial traders is shown by the indicators under the main chart. The first one, which shows the change in the net positions of the three categories of traders, shows a constant change in direction, constant intersections of lines. And this is despite the fact that there has been a steady upward trend in the last 12-13 months, which does not cause any doubt. It turns out that there is a trend and it is strong, but the most important category of traders does not buy the pound in huge amounts. Moreover, the second indicator shows that non-commercial traders have been increasing their purchases and sales in the last six months. That is, there was no clear bullish mood. This only proves the fact that the pound and the euro grew in the last year on the factor of increasing the money supply in the United States. That is, big players traded in accordance with their interests and goals, but their deals were blocked by the infusion of trillions of dollars into the US economy. Well, in the reporting week, non-commercial traders began to re-open buy contracts (longs) at around 7,200. Less than a thousand sales contracts were opened. It seems that the major players are starting to believe in the growth of the "bitcoin-like" pound.

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.