GBP/USD 5M
The GBP/USD pair is also rather boring, but still traded better than the EUR/USD pair on November 9. Volatility was about 80 points, which is not much, but this value still allows us to count on the formation of good signals. But there were no macroeconomic statistics on Tuesday. Neither in the US, nor in the UK. On the other hand, there were speeches by the heads of central banks there. But on the third hand, the markets have not received any new information from Federal Reserve Chairman Jerome Powell and Bank of England Governor Andrew Bailey. Therefore, we can assume that there was no fundamental background. But with trading signals, everything is much more complicated. The problem is that there were signals, but two out of three turned out to be extremely inaccurate. You can see it yourself in the chart above. Nevertheless, it is necessary to understand which positions should have been opened on Tuesday. First of all, it should be noted that the 1.3570 level and the Kijun-sen line should be considered, since the distance between them was only 12 points. Thus, the first buy signal was formed only in the middle of the European session, when the price bounced off the critical line and settled above 1.3570. The price could not go far up, but still worked out the nearest level of 1.3601 and bounced off it. Therefore, at this moment it was necessary to close long positions in the profit of 11 points. And open short positions. The price began to decline after the sell signal and in the same way, with great difficulty and in a few hours of time, it overcame the area of 1.3558-1.3570, which was also a sell signal. Therefore, short positions should be left open. And they should have been manually closed later in the evening. Profit was 50 points. Thus, we managed to earn about 60 points in total, which covered the loss received on the euro/dollar pair.
GBP/USD 1H
The pound/dollar pair maintains a downward trend on the hourly timeframe, as the price continues to be below the trend line. However, as we have already said, almost any upward movement in strength will fit into the framework of a downward trend, since the trend line is very far away. At the moment, the pound's quotes have managed to rise to the critical line, but they have not yet continued to move to the upside. However, we still continue to count on further strengthening of the British currency. On November 10, we distinguish the following important levels: 1.3424, 1.3519, 1.3570, 1.3601 - 1.3607, 1.3667. Senkou Span B (1.3624) and Kijun-sen (1.3558) lines can also be signal sources. It is recommended to set the Stop Loss level at breakeven when the price passes 20 points in the right direction. The Ichimoku indicator lines can move during the day, which should be taken into account when looking for trading signals. No important or interesting events in the UK on Wednesday. Thus, traders will have to focus only on the report on US inflation, which has every chance of renewing its 30-year anti-record. We draw your attention to the fact that the market can react to this report in any manner. Therefore, you should not think that the pair will definitely move in the direction you need.
We recommend you to familiarize yourself:
Overview of the EUR/USD pair. November 10. The US dollar is slowly creeping downward. This movement can stretch over months
Overview of the GBP/USD pair. November 10. The UK continues to calculate the losses from leaving the EU
Forecast and trading signals for EUR/USD for November 10. Detailed analysis of the movement of the pair and trade deals.
COT report
The mood of professional traders practically did not change during the last reporting week (October 26-November 1). However, it should be noted that the two most important days of last week – Wednesday and Thursday - when all the strongest movements occurred, were not included in the latest report. That is, in a week we will be able to see how much and in which direction the mood of professional traders has changed. In the meantime, we can only draw the same conclusions as a week ago. The green and red lines of the first indicator continue to constantly change the direction of movement, constantly intersecting. This suggests that big players themselves do not understand what to do with the pound. However, this can be clearly seen from the very schedule of the pair's movement, starting from July. These four months, the pound/dollar pair has been between the levels of 1.3400 and 1.4000, that is, in the horizontal channel. It was during this period of time that commercial and non-commercial traders changed their mood almost every week. Thus, taking into account the previous changes, we would assume that a new growth of the British currency will begin in the near future with the prospect of a 500-point rise. Moreover, the results of the Bank of England meeting were not dovish. The British currency has fallen undeservedly, which means that the markets may soon recoup this injustice. It should also be noted that during the reporting week, professional traders opened 5.8 buy contracts (longs) and 7.5 thousand sell contracts (shorts). Thus, the net position has not changed much.
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.
