GBP/USD 5M
The GBP/USD pair moved in almost the same way as the EUR/USD pair on Tuesday. Volatility slightly increased and amounted to a little more than 60 points, but this is still very small. Thus, we continue to draw attention to the fact that both major currency pairs continue to trade with low volatility. Moreover, in most cases, there is no pronounced trend movement within the day. On Tuesday, there is absolutely nothing to single out from the macroeconomic statistics in the UK. There was not a single important report, and the only more or less significant report in America was ignored by the markets. But after all the reports were published, the quotes of the pair unexpectedly fell, although there were no prerequisites for this. At least fundamental or macroeconomic. But there were technical ones, because the pair bounced four times from the resistance area of 1.3785-1.3794 during the day. Moreover, it went up twice, even by several points. However, we remind you that price taking above / below the level / line by 2-3 points is not a breakthrough that is certain. As a result, there are four sell signals and only one short position. Why is that? The first sell signal turned out to be false, and the price returned to the level of 1.3785, but Stop Loss at that time was not set to breakeven, so the deal was not closed before the second signal. But it closed after the second signal, as the pair went down 20 points, and then returned again to the area of 1.3785-1.3794. The third and fourth sell signals should be ignored, since during the time they were forming near the 1.3785-1.3794 area, two false signals had already been formed. Thus, despite the very difficult movements, the day was finished without loss.
Overview of the EUR/USD pair. September 1. Has the announcement of the start of curtailing the QE program actually been worked out by traders?
Overview of the GBP/USD pair. September 1. Great Britain has completed the evacuation of the military from Afghanistan and is threatening the new authorities with sanctions
GBP/USD 1H
The pound/dollar pair continues its upward movement within the rising channel on the hourly timeframe. The quotes fell to the lower part of the channel, to the Senkou Span B and Kijun-sen lines. Therefore, there is a high probability that the price will bounce off these lines and the lower border of the channel. Thus, with a high degree of probability, the upward trend will be maintained. At the same time, if the pair overcomes the Ichimoku indicator lines and settles below the channel, it will be a powerful sell signal. We 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 (1.3741) 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. The UK will publish a single report on business activity in the manufacturing sector on Wednesday, September 1. The United States will also publish a report on business activity in manufacturing, in two versions, Markit and ISM. The second index is considered to be much more important. Also, the US will release an important ADP report on changes in the number of employees in the private sector, which is analogous to NonFarm Payrolls. However, all PMIs can be easily ignored by the markets if their actual values do not differ much from the forecasts. And the ADP report is, in principle, almost always ignored by the markets.
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.
