GBP/USD 5M
The GBP/USD pair also continued to correct and also traded quite actively on Thursday, April 22. The pound's quotes began to fall during the European session, and in any case, the European Central Bank meeting and its results had nothing to do with the pound/dollar pair. Thus, the sale of the pound continued for technical reasons. We warned traders that the pair, instead of starting a new upward trend, may remain in the swing mode, which is most clearly visible on the 4-hour timeframe. It seems that this option is being implemented in the end. As part of the last round of the upward movement, the price went up by about 340 points. Over the past couple of days - 180 points down. We will not be surprised if the downward movement continues, despite the upward trend line on the hourly timeframe, which has already been broken once. The resumption of the downward movement on April 22 is clearly visible. Quotes began to fall in the middle of the European session, and after a while, signals began to form. The first - surpassing the extremum level of 1.3914 - for the sale was on the verge of becoming false, because the 1.3891 level was reached, a rebound was made from it, and the price returned to the 1.3914 level. However, a Stop Loss was not placed (the price did not fall by 20 points), and the pair failed to settle above the 1.3914 level. Therefore, the short position should have been left open, and later the price reached the Kijun-sen line, from which it initially bounced. The short position ended up making a profit of 40 points. Then a buy signal was formed - a rebound from the critical line - and this signal turned out to be false. Later on, the price settled below Kijun-sen and the loss was 15 points. There was no need to open new short positions to surpass the Kijun-sen line, since the nearest target - the extremum level of 1.3846 - was too close and the price could rebound from it. There was no rebound, but there was no further downward movement either. In any case, even if traders opened shorts, the Stop Loss level should have been set at breakeven, since the price went down 20 points after forming a sell signal. Thus, there should definitely not be a loss on this trade. As a result, traders could have earned around 25 points during the previous day.
GBP/USD 1H
The technical picture on the hourly timeframe still requires no explanation. The upward trend is maintained by a weak upward trend line, so a rebound from it could trigger a renewed upward movement. Unfortunately, the pound continues to move in the "swing" mode, which is clearly seen on the 4-hour timeframe. Therefore, in spite of the fact that we are now expecting a resumption of the upward movement, it is quite possible that the pair may now fall by the same 300 points that it had gone up earlier. Therefore, trading from levels and lines is still a very important aspect. Signals will be generated when the pair rebounds from them or when breakthroughs are achieved. The most important levels today are 1.3952, 1.3914, 1.3886 and 1.3846. The Kijun-sen line (1.3879) is also important; signals can also form around it. As before, it is recommended to set the Stop Loss level at breakeven when the price passes 20 points in the right direction. The nearest level/line is always used as targets (exceptions - if the target is too close to the signal). Today, the UK is set to publish service and manufacturing PMIs, as well as a March retail sales report. Meanwhile, in America, the indices of business activity in the services and manufacturing sectors will be released, and a speech by US Treasury Secretary Janet Yellen will also take place. Thus, the news calendar for today is quite abundant.
We also recommend that you familiarize yourself with the forecast and trading signals for the EUR/USD pair.
COT report
The GBP/USD pair fell by 160 points during the last reporting week (April 6-12). The chart clearly shows how strong the current downward correction is! Recall that professional traders have been actively reducing both buy and sell orders over the past 6-8 weeks. On February 23, around 69,000 were opened for the first and around 34,000 for the latter, then as of April 6, 44,000 Buy-contracts (longs) were opened, and 25,700 for Sell (shorts). Thus, in general, the ratio between longs and shorts has not changed. Only the number of contracts that were opened by the non-commercial group has changed. Hence the conclusion: the bullish mood persists among professional traders, but in general, fewer and fewer speculators want to deal with the "unbalanced" pound. Basically, the behavior of non-commercial traders is shown by the indicators under the main chart. The first one, which shows the change in the net positions of the three categories of traders, shows a constant change in direction, constant intersections of lines. And this is despite the fact that there has been a steady upward trend in the last 12-13 months, which does not cause any doubt. It turns out that there is a trend and it is strong, but the most important category of traders does not buy the pound in huge amounts. Moreover, the second indicator shows that non-commercial traders have been increasing their purchases and sales in the last six months. That is, there was no clear bullish mood. This only proves the fact that the pound and the euro grew in the last year on the factor of increasing the money supply in the United States. That is, big players traded in accordance with their interests and goals, but their deals were blocked by the infusion of trillions of dollars into the US economy. Well, in the reporting week, non-commercial traders began to re-open buy contracts (longs) at around 7,200. Less than a thousand sales contracts were opened. It seems that the major players are starting to believe in the growth of the "bitcoin-like" pound.
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.
