GBP/USD 5M

The GBP/USD currency pair again showed an enviable volatility on Monday. About 150 points passed during the day, which is a lot even for those days when the Federal Reserve publishes the results of its meeting. However, on Monday there was none of that. The pair again desperately tried to correct and again failed to overcome even the nearest extreme level of 1.2410. Thus, the price continues to remain below the lines of the Ichimoku indicator, so the trend definitely remains downward. Recall that the macroeconomic and fundamental backgrounds now play a small role in the exchange rate. Last week, the Bank of England raised its key rate and the pound fell like a wreck. Thus, we will not be at all surprised that this week, without obvious reasons, the pound will continue to fall. In favor of its growth now plays the same factor of the need to correct from time to time and that's it.

As for trading signals, everything is simple. Not a single signal was formed on Monday, despite the very high volatility. The price did not reach the extreme level 1.2410 quite a bit, but it could have been a strong sell signal. But this did not happen, so there is nothing to analyze, by and large.

COT report:

The latest Commitment of Traders (COT) report on the British pound has witnessed a new increase in bearish sentiment among professional traders. During the week, the non-commercial group closed 6,900 long positions and 2,700 short positions. Thus, the net position of non-commercial traders decreased by another 4,000. The net position has been falling for 2.5 months already, which is perfectly visualized by the green line of the first indicator in the chart above. The non-commercial group has already opened a total of 107,000 short positions and only 33,500 long positions. Thus, the difference between these numbers is threefold. This means that the mood among professional traders is now "pronounced bearish" and this is another factor that speaks in favor of the continuation of the fall of the British currency. Note that in the pound's case, the data from the COT reports very accurately reflects what is happening in the market. Traders are "strongly bearish" and the pound is also falling strongly against the US dollar. Assume the end of the downward trend, we do not see any reason. COT reports, foundation, geopolitics, macroeconomics, technique, all speak in favor of the fall of the pound and the rise of the dollar. Of course, the fall of the pound/dollar pair cannot continue forever, there must be at least upward corrections, but so far, there is not a single signal about the beginning of one.

We recommend to familiarize yourself with:

Overview of the EUR/USD pair. May 10. Going through the throes of the euro around the 5th level. Hungary blocked the oil embargo.

Overview of the GBP/USD pair. May 10. Sanctions are being introduced, the British pound is trying to rise from the dead.

Forecast and trading signals for GBP/USD on May 10. Detailed analysis of the movement of the pair and trading transactions.

GBP/USD 1H

It is clearly seen on the hourly timeframe that the pound still cannot correct normally, although last week it fell by 300 points in just one day. This failure to form a correction suggests a continuation of the downward movement. However, it can't go on forever! But as long as the price is below the critical line, the downward trend remains exactly. On May 10, we highlight the following important levels: 1.2251, 1.2405-1.2410, 1.2601, 1.2674. Senkou Span B(1.2749) and Kijun-sen(1.2445) lines can also be sources of signals. Signals can be "rebounds" and "breakthrough" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. There are no major events scheduled for Tuesday in the UK and US. However, there were no important events on Monday either, and the pound showed a volatility of 150 points... A similar picture may be observed on Tuesday.

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.