GBP/USD 5M
The GBP/USD pair traded not much better than the EUR/USD pair on Monday. First, the upward movement began quite unexpectedly, without reaching any important level or line. Secondly, there were no macroeconomic reports for the pound either. There was, however, news from US Treasury Secretary Janet Yellen, who made it clear that the US government will continue to spend large sums of money to finance certain sectors of the economy, which means an increase in the chances of passing the $6 trillion budget by Congress for fiscal year 2022, which will become a record in the post-war period. And for the US dollar, this means that the money supply will swell even more. Yellen also said that the jump in inflation is a temporary phenomenon, making it clear that the Federal Reserve is not the only one who is worried about inflation, but also the Treasury. In general, this was moderately negative news for the dollar. It is not excluded that traders reacted precisely to them on Monday, resuming short positions on the dollar. As for trading signals, there were very few of them during the past day. The upward movement began from a place where there was not even a single level near which a signal could form. A buy signal was formed only at the very end of the movement, when the pair crossed the Senkou Span B and Kijun-sen lines. Formally, traders had every right to work out this signal, but the price could not continue to move up and by the middle of the US session or late in the evening, one could manually close this position with a small amount of profit (several points). Nothing interesting happened during the day. Not in terms of trade, events and news.
Overview of the EUR/USD pair. June 8. Janet Yellen sentenced the dollar?
Overview of the GBP/USD pair. June 8. The G7 countries have signed an agreement on a single corporate tax.
GBP/USD 1H
The British pound continues to trade in the horizontal channel of 1.4100-1.4220 on the hourly timeframe and this can clearly be seen. The length of the horizontal channel is so great that it does not even fully fit into the chart. The pair has been in an absolute flat and cannot leave the horizontal channel for more than three weeks, only occasionally making attempts to surpass its borders. So yesterday the quotes returned to the upper border of this channel, and today they may fall again. You need to be ready for this. Both macroeconomics and foundation play a small role here. No important reports yesterday, but the pair did not stand still. And it cannot be any other way when inside the horizontal channel. In technical terms, we continue to draw your attention to the most important levels and recommend trading from them: 1.4080, 1.4101, 1.400 and 1.4219. Senkou Span B (1.4169) and Kijun-sen (1.4141) 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 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. There are no major events or publications scheduled in the UK or the US on Tuesday. So we believe that the flat will continue today, but volatility may remain quite high. Traders are likely to be looking forward to the end of the week, when several important reports are released in the UK and inflation data for May in the US.
We also recommend that you familiarize yourself with the forecast and trading signals for the EUR/USD pair.
COT report
The GBP/USD pair increased by 55 points during the last reporting week (May 25-31). However, in general, no one doubts the direction of the current trend - upward. It was all the more surprising to watch the latest Commitment of Traders (COT) report, which showed that over the same time period, professional traders opened 500 buy contracts and 6,500 sell contracts. That is, the net position of the "non-commercial" group decreased by 6,000, which is a decent value for the pound. Thus, the picture is as follows. The pound continues to rise and cannot even really correct. At the same time, the size of the net position of the major players practically does not change. Since the beginning of March, changes in the net position have been insignificant, which is shown by both the first and second indicators. And in any case, these changes do not in any way reflect what is happening in the market itself. Moreover, the pound continues to show growth, simply not commensurate with the bullish sentiment of non-commercial traders. Anyway, any group of traders and all together. 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 for the strengthening of the British currency. Look, by the way, at the previous section of the trend, between October 2020 and March 2021. The pound gained 1400 points, while the net positions of commercial and non-commercial groups of traders remained practically unchanged. That is, large players did not increase their purchases at this time. At the same time, the pound showed an increase of 1400 points practically without a single pullback. As they say, the presence of third-party factors is 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.
