GBP/USD 5M

The GBP/USD currency pair showed a volatility of almost 600 points on Monday. During the day, the pair managed to cover such a distance both up and down. Thus, there was no talk of any adequate movement on Monday. In our fundamental articles, we tried to figure out what exactly provoked such a strong movement, and came to the conclusion that the panic in the market, which was caused by a combination of factors, played the greatest role. Thus, a similar market sentiment may remain this week. The price continues to settle below the trend line, which now lies at a fairly long distance from it. Therefore, in the near future we should hardly expect a consolidation above it. Otherwise, we will not understand that the downward trend is over (according to the current trading system). Individual macroeconomic and fundamental events may not matter to traders this week.

Despite the fact that the volatility went off scale, and there were no levels at the current price levels, one trading signal was still formed. At the beginning of the US session, the price rebounded from the critical line, which was a sell signal. Traders could open short positions. Since there was not a single level or line below, the position had to be closed manually in the late afternoon. Profit on it amounted to about 185 points.

COT report:

The latest Commitment of Traders (COT) report on the British pound was again very eloquent. During the week, the non-commercial group closed 11,600 long positions and opened 6,000 short positions. Thus, the net position of non-commercial traders decreased by another 17,600, which is a lot for the pound. The net position indicator has been growing for several months, but 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). And now it has begun a new decline, so the British pound still cannot count on a strong growth. How can you count on it if the market sells the pound more than it buys? And now its decline has completely resumed and multi-year lows are updated almost every day, so the bearish mood of major players can only intensify in the near future. The non-commercial group now has a total of 109,000 shorts and 41,000 longs open. The difference is again almost threefold. The net position will have to show growth for a long time to at least equalize these figures. Moreover, one should not forget about the high demand for the US dollar, which also plays a role in the fall of the pound/dollar pair.

We recommend to familiarize yourself with:

Overview of the EUR/USD pair. September 27. The euro continues to fall by inertia. The results of the elections in Italy have nothing to do with it.

Overview of the GBP/USD pair. September 27. The pound finally has a real chance of completing a long downtrend.

Forecast and trading signals for EUR/USD on September 27. Detailed analysis of the movement of the pair and trading transactions.

GBP/USD 1H

The pound/dollar pair continues its downward trend on the hourly timeframe, which is already in fact a collapse. What else do we call an 800-point move in two days? In the coming days, the pair can fly from side to side for mind-boggling distances, and the fundamentals and macroeconomics are unlikely to have any significance for the market. We highlight the following important levels on September 27: 1.0357, 1.0930, 1.1212, 1.1354, 1.1442. Senkou Span B (1.1475) and Kijun-sen (1.0909) 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. No major events scheduled in the UK on Tuesday, and we will only receive an ordinary report on orders for durable goods in America. It is unlikely that with the volatility of 600 points a day earlier, this report will have at least some impact on the pair's movement.

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.