GBP/USD 5M

The GBP/USD currency pair showed almost exactly the same movements as the EUR/USD pair on Friday. In the European trading session, these are sluggish and unhurried movements, in the US one - "swing" under the influence of macroeconomic statistics from overseas. There were no important events in the UK, so the macroeconomic background for both currency pairs was the same. Therefore, the movements were the same. But, if at the end of the day the euro stayed above the critical line, then the pound is now already below the Senkou Span B line. And this suggests that the probability of a further fall of the pound is much higher than that of the euro. Or now a "flat" will begin and then the lines of the Ichimoku indicator will not have any meaning.

Let's analyze all the trading signals. Not a single one was formed at the European session, but there were quite a lot of them at the US session, and almost all of them were very complex and not very accurate. It all started with a sell signal to consolidate the price below the Kijun-sen. This signal was formed right at the time when reports on Nonfarm and unemployment in the US were published, so it could be safely ignored. Then the pair returned to the critical line and rebounded from it again, but did not start falling, but made a successful attempt to overcome the critical line, which turned out to be successful, but the buy signal was false. Traders could open a short position on the corresponding signal and receive a loss on it, but the buy signal should not have been worked out, because the Nonfarm report turned out to be stronger than forecasts, which means that it was impossible to expect the pair to grow. As a result, everything ended with another sell signal near the Kijun-sen line, which could have been worked out, and it brought the main profit of about 40 points. The total profit is small, but the movements on Friday were not the most pleasant.

COT report:

The latest Commitment of Traders (COT) report on the British pound showed minimal changes. During the week, the non-commercial group opened 4,800 long positions and closed 1,400 short positions. Thus, the net position of non-commercial traders increased by 6,200, for the first time in a long time. The net position has been falling for three months, which is perfectly visualized by the green line of the first indicator in the chart above or the histogram of the second indicator. Therefore, one increase in this indicator is unlikely to unambiguously indicate the end of the downward trend for the pound. The non-commercial group has already opened a total of 105,000 shorts and only 31,000 longs. Thus, the difference between these numbers is already more than three times. This means that the mood among professional traders now remains "pronounced bearish". We note that in the case of the pound, the COT report data very accurately reflects what is happening in the market: the mood of traders is "very bearish", and the pound has been falling against the US dollar for a long time. In the past few weeks, the pound has shown growth, but even in the chart for this paragraph (daily timeframe), this movement looks very weak. Since in the case of the pound, the COT report data reflects the real picture of things, we note that a strong divergence of the red and green lines of the first indicator often means the end of the trend. Therefore, formally now we can count on a new upward trend. However, weak geopolitical, fundamental and macroeconomic backgrounds for European currencies may again put pressure on these currencies.

We recommend to familiarize yourself with:

Overview of the EUR/USD pair. June 6. ECB meeting: does it make sense to follow it at all?

Overview of the GBP/USD pair. June 6. Nonfarm knocked down the British pound.

Forecast and trading signals for EUR/USD on June 6. Detailed analysis of the movement of the pair and trading transactions.

GBP/USD 1H

Last Friday, the pair traded showed almost one-way movement as a whole on the hourly timeframe and is now below the Senkou Span B line. Consolidation is not the most confident, so we do not exclude the possibility that a reverse consolidation above this line may follow. The pound is still in a position where it can move in any direction. Today, we highlight the following important levels: 1.2259, 1.2405-1.2410, 1.2496, 1.2601, 1.2659, 1.2762. The Senkou Span B (1.2497) and Kijun-sen (1.2555) 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. There are no major events or publications scheduled for Monday in the UK and US. Thus, intraday volatility may not be high.

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.