GBP/USD 5M
The GBP/USD pair is absolutely different from the EUR/USD pair on Tuesday. However, the British pound remains within its horizontal channel, therefore, in general, both major pairs continue to move sideways, that is, in the same way. The pair continues to remain between the 1.3170 and 1.3276 levels, that is, in a 100-point horizontal channel. Therefore, at this time, it is very difficult to rely on strong trading signals and high profits. Yesterday's volatility amounted to 65 points, which is not much for the pound, but one could still count on a couple of good signals. Unfortunately, these hopes were not destined to come true. It all started with the fact that at night the pair was unable to go down to the extremum level of 1.3185 in order to rebound from it. This level is strong, therefore the signal around it could be strong. Then the pair crossed the Senkou Span B line, which could be interpreted as a buy signal, but yesterday we warned that the Ichimoku indicator lines are weakening in the flat, so this signal should not be worked out. As you can see, it turned out to be false anyway. The second signal of the day in the form of a rebound from the Senkou Span B line should also be ignored, for the same reasons. And no more signals were generated. There was not a single macroeconomic report or other event on Tuesday for the markets to react to.
GBP/USD 1H
On the hourly timeframe, the pound/dollar pair bounced off the lower border of the horizontal channel, so it may continue to move up. At the moment, it has to overcome the lines of the Ichimoku indicator, but above them only the level of 1.3276, which is the upper border of the horizontal channel. We see no reason for the pair to leave it yet. Thus, we expect a rebound from the Senkou Span B, Kijun-sen lines and the level of 1.3276. If bulls still manage to get the pair through these obstacles, then the pound may rise in price against the US currency at the end of the year. We distinguish the following important levels on December 22: 1.3170-1.3185, 1.3276, 1.3362. There are no levels below, since the price has not been so low for over a year. Senkou Span B (1.3266) and Kijun-sen (1.3272) lines can also be sources of signals, but in flat conditions these lines lose their strength. Signals can be "rebounds" and "breakthroughs" of these levels and lines. 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. On Wednesday, the UK will publish its third quarter GDP report and a similar report will be released in the United States. Thus, formally, traders will have something to pay attention to today. In fact, these reports have low chances of provoking a market reaction.
We recommend you to familiarize yourself:
Overview of the EUR/USD pair. December 22. New Year's holidays are likely to be under siege because of the Omicron.
Overview of the GBP/USD pair. December 22. 90,000 cases per day, but Boris Johnson refuses to introduce a "lockdown".
Forecast and trading signals for EUR/USD for December 22. Detailed analysis of the movement of the pair and trade deals.
COT report
The mood of commercial traders was much more bearish during the last reporting week (December 7-13). Commercial traders closed 6,700 sell contracts (shorts) and 20,100 buy contracts (longs) during the week. Thus, the net position for the "non-commercial" group of traders decreased by 13,400 contracts, which is a lot for the pound. Thus, unlike the euro currency, the pound, according to COT reports, continues to fall quite reasonably: major players continue to sell it. However, the green and red lines of the first indicator (which mean the net positions of the non-commercial and commercial groups) have already moved far away from each other. Recall that such a deletion signals the imminent end of the trend. However, as with any fundamental assumptions, specific technical signals are required to work out this hypothesis, which are not currently available. If we do not take into account the increase in the key rate by the Bank of England, then there are no special fundamental reasons for the growth of the pound now either. Recall that Prime Minister Boris Johnson continues to get into various scandals in Great Britain and there is already talk that he will leave his post before the end of the deadline. The pandemic in the UK is gaining momentum and the other day an anti-record was set for the daily number of infections. Omicron is also spreading quite rapidly across the country, creating additional risks for the healthcare system and the economy. London, on the other hand, cannot find a common language with Paris and Brussels, which threatens it with the deterioration of relations with its closest neighbors and the loss of markets for the sale of products. But there is no positive news.
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.
