GBP/USD 5M
The GBP/USD pair traded in a much more appealing manner on Thursday. Firstly, only the US inflation report mattered for the pound/dollar, nothing else had any effect on it. Secondly, signals began to form during the European session. Thirdly, there were no frequent and sharp turns, "swings", during the day. We have already spoken about US inflation, it exceeded the forecasted values and amounted to 5%, so it is not surprising that the dollar slipped against the pound. The first trading signal for buying appeared in the morning in the form of a rebound from the extremum level of 1.4080. Long positions should have been opened here. A little later, the quotes came close to the extremum level of 1.4101 and the time was just approaching the moment when the US inflation report was going to be published. Therefore, here it was necessary to set Stop Loss to breakeven or to manually close a long position. In the first case, it all depends on where exactly the Stop Loss was placed, since the price significantly dropped after the US inflation report was released. Nevertheless, traders could earn 50 points on this trade or it closed at breakeven. In any case, no loss was received, which is very good on such active movements. In the second case, it was possible to earn about 20 points. All subsequent signals after the US inflation report should be ignored, since the movements that had started were very strong and with reversals. Although the price has reached the Kijun-sen and Senkou Span B lines several times. However, we do not recommend that traders take risks in such cases. In general, the pound also remained in the horizontal channel of 1.4100-1.4220, in which it has been for more than three weeks. Thus, in technical terms, nothing has changed for the pound/dollar pair.
Overview of the EUR/USD pair. June 11. Inflation in the US is growing, the ECB leaves the parameters of monetary policy unchanged.
Overview of the GBP/USD pair. June 11. Regular negotiations between London and Brussels ended without progress.
GBP/USD 1H
The British pound continues to trade in the 1.4100-1.4220 horizontal channel on the hourly timeframe. This is even better seen here. The pair has been in an absolute flat for more than three weeks and cannot leave the horizontal channel, only occasionally making attempts to surpass its borders. Moreover, even rebounds from the channel boundaries cannot be used as signals, since they are far from being clear all the time. In technical terms, we continue to draw your attention to the most important levels and recommend trading from them: 1.4080, 1.4101, 1.400 and 1.4219. These levels have not changed for a long time, because the price continues to be in a limited range. Senkou Span B (1.4165) and Kijun-sen (1.4135) lines can also be sources of signals, but they are weak in the flat. It is recommended to set the Stop Loss level at breakeven when the price passes in the right direction by 20 points. The Ichimoku indicator lines can move during the day, which should be taken into account when looking for trading signals. There will be several important events for the GBP/USD pair on Friday that cannot be ignored. Although, upon closer examination, it becomes clear that only the speech of Andrew Bailey, as well as several members of the Bank of England's monetary committee, is really important. The market will direct their attention on Bailey's speech, as everyone expects comments from him about the possible tightening of monetary policy and the curtailment of the quantitative stimulus program. It is not certain that the BoE governor and his colleagues will touch on these topics, however, there is a possibility. In addition, the UK will publish reports on GDP and industrial production. However, GDP is not quarterly, but monthly, which usually does not cause any market reaction. The same goes for industrial production...
We also recommend that you familiarize yourself with the forecast and trading signals for the EUR/USD pair.
COT report
The GBP/USD pair increased by 55 points during the last reporting week (May 25-31). However, in general, no one doubts the direction of the current trend - upward. It was all the more surprising to watch the latest Commitment of Traders (COT) report, which showed that over the same time period, professional traders opened 500 buy contracts and 6,500 sell contracts. That is, the net position of the "non-commercial" group decreased by 6,000, which is a decent value for the pound. Thus, the picture is as follows. The pound continues to rise and cannot even really correct. At the same time, the size of the net position of the major players practically does not change. Since the beginning of March, changes in the net position have been insignificant, which is shown by both the first and second indicators. And in any case, these changes do not in any way reflect what is happening in the market itself. Moreover, the pound continues to show growth, simply not commensurate with the bullish sentiment of non-commercial traders. Anyway, any group of traders and all together. Thus, we continue to talk about such a global factor as the injection of trillions of dollars into the American economy, which, from our point of view, is the main reason for the strengthening of the British currency. Look, by the way, at the previous section of the trend, between October 2020 and March 2021. The pound gained 1400 points, while the net positions of commercial and non-commercial groups of traders remained practically unchanged. That is, large players did not increase their purchases at this time. At the same time, the pound showed an increase of 1400 points practically without a single pullback. As they say, the presence of third-party factors is obvious.
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.
