GBP/USD 5M
The GBP/USD pair moved in the same way as the EUR/USD pair on Monday. Volatility amounted to 40 points and this is the same as for the euro currency - 27 points. With such volatility, it is extremely difficult not only to make money, but even just to open trade deals. Moreover, not only weak volatility, but also frankly sideways movement during the day, prevented traders from trading the pound/dollar pair. Monday's macroeconomic background was completely blank. Not a single report, not a single important event. Thus, traders could work out the two buy signals that eventually formed near the extremum level of 1.3747. But they formed in the middle of the day, when it became clear that volatility was low, and the trend movement was completely absent. Therefore, traders could open a long position, but only one, since the signals, in fact, duplicated each other. In the second case, the quotes of the pair went below the level of 1.3747, however, the Senkou Span B and Kijun-sen lines were located a little lower. Therefore, in order for a sell signal to form (and, accordingly, to cancel a buy signal), it was necessary to overcome all three lines, which did not happen. Well, a long position could be closed at absolutely any time. Even in profit by a few points.
Overview of the EUR/USD pair. August 31. A very interesting week awaits us. The euro will try to build on its recent success
Overview of the GBP/USD pair. August 31. All eyes on NonFarm Payrolls and ADP report. The dollar will try to find support from them
GBP/USD 1H
The pound/dollar pair continues its upward movement within the rising channel on the hourly timeframe. Therefore, the situation is exactly the same as for the euro, almost mirrored. Until the price has settled below the rising channel, we can count on the pound to continue strengthening. We remind you that we consider the option with the long-term growth of the pound as the main one. However, it should also be noted that the volatility remains low for the pound/dollar pair, so the upward movement, although present, is still very slow and sluggish. We also continue to draw the attention of traders to the most important levels and recommend trading from them: 1.3677, 1.3747, 1.3785 - 1.3794. Senkou Span B (1.3739) and Kijun-sen (1.3729) lines can also be sources of signals. 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. No major report or other fundamental event will be released in the UK on Tuesday, August 31. Nothing important planned in the US either. It will be possible to pay attention to the consumer confidence indicator. However, most likely, no reaction will follow. Thus, there can also be very weak movements during the day, as well as the absence of a trend. However, the lack of macroeconomic reports does not guarantee that the pair will stand in one place all day.
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 120 points during the last reporting week (August 17-23). And the number of Buy contracts (longs) of a group of "non-commercial" traders decreased by only 2,000 during the same time. However, the number of Sell contracts (shorts) increased by 19,000. Therefore, something happened in the pound that has not yet happened to the European currency. The mood of large traders has officially changed to bearish, as now they have more open contracts to sell than buy. A bit unexpected. It turns out that major players reduced their net positions in both the euro and the pound in the last reporting week. Was it connected with the same expectations of hawkish rhetoric from Federal Reserve Chairman Jerome Powell, which was not destined to be voiced? One way or another, according to the Commitment of Traders (COT) reports, much more interesting prospects for a decline are opening up for the pound than for the euro. True, all other fundamental and technical factors continue to speak in favor of the dollar's decline, and not vice versa. Therefore, we believe that at this time it is necessary to rely on technical factors. This is the 1.3600-1.3666 area for the pound. A confident breakthrough will allow us to expect a succeeding decline in the pair's quotes. However, since Powell did not report anything that could support the US dollar, it will be difficult for the greenback to count on a new round of appreciation. We also remind you that the "factor of the Fed's cash infusions" continues to work against the dollar, which inflate the money supply and provoke an increase in inflation. In general, even with the readings of the COT reports, the further growth of the dollar is far from 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.
