GBP/USD 5M

The GBP/USD currency pair fell by 800 points on Friday and Monday night and is already approaching price parity. In principle, we do not know what else can be said about this. Panic and chaos reign in the market. Everything that can only fall falls. Except, of course, the US dollar, which is still used by everyone as the most stable and safe defensive asset. Frankly, given what is happening now in the world and the complete uncertainty about when and how everything will end, we are no longer sure that the US dollar is really the currency that is absolutely not threatened by anything. However, most market participants believe that it is better to buy the dollar, and are happy to do so. I don't even feel like talking about business activity indices in the UK and the US, which came out on Friday, because they are definitely not the cause of the collapse that happened. We believe that such events occur due to geopolitical aggravation, and even the currency market itself shows us how serious things can be. I do not want to start talking about various platitudes about the Third World War, but the fact that the situation can worsen significantly before it finally improves is almost 100%.

Naturally, not a single trading signal was formed on Friday, because the pound had already gone well below its 37 year lows. We can't even tell if the pound has ever been that low in principle? While this article was being written, the pound resumed its decline and fell by 100 points. The price simply flies from side to side, covering fantastic distances in short periods of time. Therefore, if you trade the pair now, then do so on higher timeframes using the Heiken Ashi indicator.

COT report:

The latest Commitment of Traders (COT) report on the British pound was again very eloquent. During the week, the non-commercial group closed 11,600 long positions and opened 6,000 short positions. Thus, the net position of non-commercial traders decreased by another 17,600, which is a lot for the pound. The net position indicator has been growing for several months, but the mood of the big players still remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). And now it has begun a new decline, so the British pound still cannot count on a strong growth. How can you count on it if the market sells the pound more than it buys? And now its decline has completely resumed and multi-year lows are updated almost every day, so the bearish mood of major players in the near future can only intensify. The non-commercial group now has a total of 109,000 shorts and 41,000 longs open. The difference is again almost threefold. The net position will have to show growth for a long time to at least equalize these figures. Moreover, one should not forget about the high demand for the US dollar, which also plays a role in the fall of the pound/dollar pair.

We recommend to familiarize yourself with:

Forecast and trading signals for EUR/USD on September 26. Detailed analysis of the movement of the pair and trading transactions.

GBP/USD 1H

The pound/dollar pair continues its downward trend on the hourly timeframe, which can already be called a collapse. How else to call a movement of 800 points in less than a day and a half? In the coming days, the pair can fly from side to side for mind-boggling distances, and the fundamentals and macroeconomics are unlikely to have any significance for the market. We highlight the following important levels on September 26: 1.1212, 1.1354, 1.1442, although the closest level is about 800 points away from the current price value. Senkou Span B (1.1543) and Kijun-sen (1.0909) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" 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 will be several speeches by representatives of the Bank of England and the Federal Reserve in the UK and the US on Monday, which is very interesting in the current circumstances, but these events are unlikely to provoke a market reaction. Even if provoked, it is unlikely that anyone will notice it.

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.