GBP/USD 5M
The GBP/USD currency pair continued to move as unsightly as possible for traders. Yesterday there was a very weak intraday movement, but the total volatility of the day was about 60 points, so even if there were strong signals, it would not have been possible to earn a lot. But as practice has shown, there were no strong signals during the day. But there were quite important macroeconomic statistics. Both in the UK and in the US. A report on inflation was published in Britain, which accelerated to 5.5% y/y in January. This report is important because it concerns the Bank of England's future actions to tighten the monetary policy. It has already raised the key rate twice, but, as we can see, inflation still continues to grow. We can hope that BoE will raise the rate again at the next meeting, and the pound could show growth today. It did show growth, but was too weak. A report on retail sales was published in the United States, which the market simply ignored, although such data could also be worked out.
As for trading signals, there were only two of them. The first one was formed within five hours and it is very difficult to call it strong. The price rose to the critical line in the European session and only managed to bounce off it at the beginning of the US session. In total, the price went down 18 points after this signal. Therefore, traders could set a Stop Loss to breakeven on a short position, at which it closed in the end, when the pair already settled above the Kijun-sen line. This buy signal was already stronger, as the price crossed the line in five minutes. However, the upward movement after its formation also could not continue – the price passed only 19 points until the evening, which again was enough to set the Stop Loss to breakeven, at which the long position closed. As a result, we have two deals and two Stop Losses at breakeven. The most boring day, boring movements.
COT report
The latest Commitment of Traders (COT) report on the British pound showed a sharp increase in the bullish mood among the "non-commercial" group. During the week, professional traders opened 15,000 long positions and such changes are significant for the pound. It is not surprising that the major players behaved this way last week, since it was then that the Bank of England announced its decision to raise the key rate by 0.25%. However, the overall picture of the state of things provided by the COT reports now speaks of utter uncertainty. Let's start with the fact that even after the net position of large players has grown by 15,000, their mood is called bearish, since the total number of open long positions per pound is less than the total number of open short ones. Moreover, the chart above clearly shows that the green and red lines of the first indicator, which display the net positions of the two most important groups of traders "commercial" and "non-commercial" are now again near zero. And finding the net position indicator near the zero mark means that the number of long and short positions is approximately the same. Moreover, recent changes in net positions do not give grounds to conclude that the trend has ended now or a new one is starting. Roughly speaking, the mood of the players is changing too quickly, so it is impossible to talk about any long-term trends now.
We recommend to familiarize yourself with:
Overview of the EUR/USD pair. February 17. "That's it, there will be no kin, the electricity is over."
Overview of the GBP/USD pair. February 17. Boris Johnson is doing his best to distract attention from the scandal with his own participation through the Ukrainian-Russian conflict.
Forecast and trading signals for EUR/USD on February 17. Detailed analysis of the movement of the pair and trading transactions.
GBP/USD 1H
On the hourly timeframe, the technical picture is such that no comments are even required to describe it. This is a "swing". Or a roller coaster. One way or another, but such movements are extremely difficult to work out. Moreover, there is no trend now, there is no trend line, there is no channel. Therefore, traders do not have any guidelines at their disposal, except for lines and levels. We highlight the following important levels on February 17: 1.3439, 1.3489, 1.3609, 1.3643, 1.3667. The Senkou Span B (1.3538) and Kijun-sen (1.3565) lines can also be signal sources. Signals can be "bounces" and "breakthroughs" of these levels and lines. It is recommended to set the Stop Loss level to breakeven when the price passes in the right direction by 20 points. The lines of the Ichimoku indicator can move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels on the chart that can be used to take profits on transactions. No interesting events and reports scheduled for Thursday either in the US or in the UK. There will be only hope for geopolitical news. Recall that the Ukrainian-Russian crisis has not been resolved in any way, which means that new data on this topic may arrive at any moment. In the event of an escalation of the conflict, the US dollar may rise in price. And vice versa.
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.
