GBP/USD 5M
Yesterday, the GBP/USD pair first passed around 100 points from high to low, so the price crossed many more important lines and levels during the day than the euro/dollar pair. Accordingly, much more trading signals were generated. The first trading signal to sell was formed at the very beginning of the European trading session in the form of a very accurate price rebound from the critical Kijun-sen line. However, at the same time, the UK published data on unemployment, wages and claims for unemployment benefits, which turned out to be stronger than traders expected. But, as we can see, these data did not have any beneficial effect on the British currency rate. Thus, after 20 minutes after these reports were released, it became clear that the rebound from Kijun-sen was not false, which means that short positions should have been opened. Further, the price just made that fall by 100 points, which was mentioned above. On the way, the extremum levels 1.4101 and 1.4080 were surpassed, around which one should not take any action, but simply stay in short positions. As a result, the price dropped even below the support level of 1.4053. Recall that no trading signals are formed near the usual support levels. And there was a very delicate moment here, as the price turned up at the beginning of the US session and started to grow. Thus, the 1.4053 level could be used exclusively to close short positions. As a result, traders could have earned 56 points on the very first signal. But even if traders closed the deal near the level of 1.4080, they still got several tens of profits. A blatant flat began at the level of 1.4080 in the US trading session. The price traded along the level for several hours, so there should not have been any new trading positions opened here.
Overview of the EUR/USD pair. June 16. The US dollar has the potential to rise by 400 points, but this may take up to 3 months.
GBP/USD 1H
The British pound left the 1.4100-1.4220 horizontal channel on the hourly timeframe. Thus, we can now count on a slight strengthening of the dollar, which has recently gone up in half with grief, but still has risen in price against the euro and the pound. True, everything can change by today's Federal Reserve meeting, during which we are unlikely to witness hawkish notes. Nevertheless, while the dollar is growing, it is growing in an uncertain and weak manner. The trend is now downward, but, as in the case of the euro, this trend borders on the concept of flat. In technical terms, we continue to draw your attention to the most important levels and recommend trading from them: 1.4008, 1.4080, 1.4101 and 1.4200. 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 (1.4109) 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. A very important inflation report will be released in the UK on Wednesday, which traders are unlikely to ignore. Although everything will depend on how much inflation accelerates in May. Forecasts say that it could reach up to 1.8% y/y. If it turns out to be more, then the pound may be under pressure from the market. Summing up the results of the Fed meeting will take place in the evening. This is always an important event, but by that time traders can already leave the market and close all trading transactions so as not to risk in vain, as the reaction can be unpredictable.
We also recommend that you familiarize yourself with the forecast and trading signals for the EUR/USD pair.
COT report
The GBP/USD pair fell by 25 points during the last reporting week (June 1-7). However, in general, no one doubts the direction of the global trend is upward, and the recent weeks' movement has been an absolute flat. The latest Commitment of Traders (COT) report showed that professional traders closed approximately the same number of Buy (longs) and Sell (shorts) contracts. It is this moment that very clearly indicates what is happening now with the pound/dollar pair. However, in general, the pound continues to grow and cannot even really correct. At the same time, the size of the net position of the major players practically does not change. Changes in the net position have been insignificant since the beginning of March, which is shown by both the first and second indicators. Moreover, the pound continues to show growth, it simply does not commensurate with the bullish sentiment of non-commercial traders. 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 why the pound strengthens. Look at the previous section of the trend between October 2020 and March 2021. The pound gained 1,400 points, while the net positions of commercial and non-commercial groups of traders remained practically unchanged. That is, large players did not increase their long positions at this time. At the same time, the pound grew by 1400 points practically without a single pullback.
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.
