GBP/USD 5M

The GBP/USD currency pair continued to fall on Monday, but not as strong as the EUR/USD pair. However, this does not change the essence of the matter at all. The meaning still remains the same - the pound is falling as well as the euro. Some days it's stronger, some days it's weaker. In order to sell European currencies with a clear conscience, traders do not even need macroeconomic statistics now. It wasn't there at all on Monday. Thus, the conclusion can only be drawn the same: the foundation and geopolitics continue to have a devastating effect on European currencies. Naturally, paired with the US dollar, which looks safer, more stable and more attractive. What else can be added here? No news, no reports, no events... Federal Reserve Chairman Jerome Powell is set to speak on Friday, but who cares if both major pairs are going down now?

There were many more trading signals for the pound/dollar pair on Monday, and most of them turned out to be false, because the movement was not as trendy as for the euro/dollar pair. The first four signals formed near the level of 1.1807, and the first three turned out to be false. Thus, traders could work out only the first two signals. Unfortunately, neither the first nor the second deal managed to set Stop Loss to breakeven, since the price never managed to move even 20 points in the right direction. Thus, despite the fall of both pairs on Monday, the euro movement was not bad, and the pound - unpleasant. The last two signals near the 1.1759 level should not have been considered, as they formed too late.

COT report:

The latest Commitment of Traders (COT) report on the British pound was not impressive. During the week, the non-commercial group opened 1,800 long positions and 500 short positions. Thus, the net position of non-commercial traders immediately increased by 2,300, but this is a minimal change for the pound. Despite the growth of this indicator, 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 has been constantly growing, but the pound shows only a very weak tendency to rise. And now its fall has resumed altogether, so the bearish mood of major players may intensify in the near future. The non-commercial group now has a total of 77,000 shorts and 44,000 longs open. That is, the difference is almost twofold. The net position will have to show growth for a long time to at least equalize these numbers. Moreover, COT reports are a reflection of the mood of major players, and their mood is influenced by the foundation and geopolitics. If they continue to be as disappointing as they are now, then the pound may still be on the "downward peak" for a long time. Take note that when the green and red lines of the first indicator move far away from each other, this is a harbinger of the end of the current trend. But in our case. These lines have been converging for several consecutive months, but the pound is still falling and continues to do so in the long term.

We recommend to familiarize yourself with:

Overview of the EUR/USD pair. August 23. Energy crisis in the European Union or why the euro is falling?

Overview of the GBP/USD pair. August 23. Boris Johnson would win the Prime Ministerial election if he ran.

Forecast and trading signals for EUR/USD on August 23. Detailed analysis of the movement of the pair and trading transactions.

GBP/USD 1H

The pound/dollar pair continues its downward movement on the hourly timeframe. The pound easily updated its 2-year lows on Monday and, in general, does not even intend to correct itself yet. There is a descending trend line, but the price is located at such a large distance from it that, in principle, it is not of much use now. However, it visualizes what is happening in the market. We highlight the following important levels for August 23: 1.1759, 1.1807, 1.1874, 1.1974, 1.2007. The Senkou Span B (1.2139) and Kijun-sen (1.1941) 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. The UK and the US are set to publish reports on business activity in the services and manufacturing sectors. It is difficult for us to say whether traders need this data at all at this time, if the euro and the pound will still continue to fall?

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.