GBP/USD 5M

The GBP/USD currency pair tried to continue growing on Thursday, but there were no grounds for this, unlike Wednesday, so the bulls' attempts stopped very quickly. The pair could not even reach the level of 1.2259 again, but could not consolidate below the level of 1.2185. Therefore, we are now worried that the pound will not be stuck inside the horizontal channel for a long time. Of course, with such an important report as GDP looming on the horizon, it's hard to imagine that the pound will spend at least one more day to the 75-point horizontal channel. However, we cannot yet say that the upward trend has resumed, as the pair has not even broken through the last local high. And the fundamental background has not changed so much lately that now the market mood has become sharply bullish. The situation is about the same as for the euro. We admit that due to the inflation report, most players will turn their backs on the dollar, but we also admit that this may be a "trap". Still, the Federal Reserve will continue to raise the key rate, and the dollar will no longer rise in price on this factor? Actually, why? After all, this is illogical!

With trading signals for the pound, everything is as simple as five pennies, because only one was formed on Thursday, and the whole pair was trading sideways. Thus, it is still very good that only one signal was formed, since there could be much more, and in a flat, most of the signals are false. We also had a buy signal near the level of 1.2185, after which the pair went up 50 points in total. However, it did not reach the nearest target level, so the long position had to be closed manually in the late afternoon. 25 points on it could be earned.

COT report:

The latest Commitment of Traders (COT) report again showed insignificant changes. During the week, the non-commercial group closed 5,300 long positions and 2,900 short positions. Thus, the net position of non-commercial traders decreased by 2,400. But what does it matter, if 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)? To be fair, in recent months, the net position of the non-commercial group is still growing and the pound also shows some tendency to grow. However, both the growth of the net position and the pound's growth are now so weak (in global terms), so it is still difficult to conclude that this is the beginning of a new upward trend. It is rather difficult to call the current growth even a "correction". We also said that the COT reports do not take into account the demand for the dollar, which is likely to remain very high right now. Therefore, to strengthen the British currency requires that the demand for it grows faster and stronger than the demand for the dollar. And on the basis of what factors is the demand for the pound growing now?

The non-commercial group currently has a total of 86,000 short positions open and only 29,000 long positions. The net position will have to show growth for a long time to at least equalize these figures. The pound can provide theoretical support through the technical need to be corrected from time to time. There is nothing more for the British currency to count on now.

We recommend to familiarize yourself with:

Overview of the EUR/USD pair. August 12. The ECB seeks to keep countries with weak economies afloat.

Overview of the GBP/USD pair. August 12. The pound hid in a tiger pose ahead of the UK GDP report.

Forecast and trading signals for EUR/USD on August 12. Detailed analysis of the movement of the pair and trading transactions.

GBP/USD 1H

The pair is trying to resume the upward trend on the hourly timeframe, but much now depends on the level of 1.2259, above which it has not yet been possible to gain a foothold. Also, a lot now depends on the British macroeconomic statistics, which will be published this morning. We still do not believe in the strong growth of the British pound. We highlight the following important levels for August 12: 1.2033, 1.2106, 1.2185, 1.2259, 1.2342, 1.2429. Senkou Span B(1.2127) and Kijun-sen (1.2140) 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. As has been said a million times, the UK will release its GDP and industrial production data on Friday. Moreover, the second report was included in this list of statistics rather formally. Traders will focus on GDP in the second quarter, and the stronger the deviation from the forecast, the higher the likelihood of a strong market reaction.

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.