GBP/USD 5M

The GBP/USD currency pair on Monday, unlike the EUR/USD pair, did not stand in one place. This, by the way, is quite strange, since the fundamental background for both pairs was approximately the same. Nevertheless, in the first half of the day, the British pound slowly declined, as if accelerating before a new upward spurt. And in the US trading session, it began to grow rapidly, but in the end it again turned out to be near the extreme level of 1.3194, as well as near the Senkou Span B line, which it again failed to overcome. We have already written earlier that the 1.3194 level (and the levels next to it) is strong, so overcoming them will allow the pound to count on a new growth. And while this has not happened, the British currency will hang around this level or start a new fall. Nevertheless, if the fourth test of this area happens, the chances that sooner or later it will still be overcome will increase significantly.

As for trading signals, not a single one was formed during the past day. More precisely, the only signal was formed when the pair bounced from the area of 1.3194-1.3209, but there was no clear consolidation below the level of 1.3194, and the signal itself was formed late enough to try to work it out. If you look at the 4-hour TF, you can clearly see with what difficulty the pound/dollar pair is growing now. Therefore, in any case, it is very difficult to count on a strong growth of the pound.

COT report:

The latest Commitment of Traders (COT) report showed an increase in the bearish mood among commercial traders. However, in general, the mood of the major players has changed too often in recent months, which is clearly seen by the two indicators in the chart above: they are constantly changing the direction of their movement. At the moment, the number of open long positions is less than the number of short positions by almost 30,000. Although two weeks ago their number was almost the same. Earlier, we concluded that major players could not make a decision regarding the British pound, but we also drew attention to the fact that with the complication of the geopolitical situation, the demand for the US currency grew very much, which could "cross out" the data of COT reports. However, now the current picture of what is happening in the foreign exchange market is already beginning to correspond to the COT reports. Thus, the pound may now be at the beginning of a new round of decline. But, since in recent weeks it has only been falling, now another upward correction may follow, and then everything will depend on the geopolitical background. Like the mood of traders, the market situation can change rapidly. A month ago, few people believed that an armed conflict could break out in the center of Europe on a huge territory. Therefore, you need to be prepared for everything, and use COT reports only as an additional factor of assessment and forecasting.

We recommend to familiarize yourself with:

Overview of the EUR/USD pair. March 22. The European Union is preparing to impose an embargo on Russian oil.

Overview of the GBP/USD pair. March 22. The UK continues to impose sanctions and says it will never lift existing ones.

Forecast and trading signals for EUR/USD on March 22. Detailed analysis of the movement of the pair and trading transactions.

GBP/USD 1H

An ascending channel has been formed on the hourly timeframe, within which the price is still located. It also continues to be located between the Kijun-sen and Senkou Span B lines, so now it has a lot of obstacles on both sides. Consequently, the pound's succeeding growth depends on the ability to overcome the Senkou Span line B. And the further growth of the US currency depends on the ability of the bears to gain a foothold below the channel and the Kijun-sen line. On March 21, neither the first nor the second turned out. We highlight the following important levels on March 22: 1.3000, 1.3087, 1.3194, 1.3273. The Senkou Span B (1.3209) and Kijun-sen (1.3118) lines can also be signal sources. Signals can be "bounces" and "breakthroughs" of these levels and lines. It is recommended to set the Stop Loss level to breakeven when the price passes in the right direction by 20 points. The lines of the Ichimoku indicator can move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels on the chart that can be used to take profits on transactions. There are no important events or events scheduled for Tuesday in either the US or the UK. The pair will try to break out of the price area in which it found itself. Trading decisions will have to be made on a bare "technique".

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.