GBP/USD 5M
The GBP/USD pair moved in almost the same way as the EUR/USD pair on September 1. If the volatility for the euro/dollar pair increased to 60 points, then it remained at the level of 60 points for the pound/dollar, which is very, very little for this pair. Thus, we can say that the pound/dollar pair moved very weakly and reluctantly on Wednesday. Macroeconomic reports for it were practically the same, except for the European reports that were ignored by the market, which were replaced by a British one - on business activity in the manufacturing sector. However, it did not provoke any particular reaction from the markets. In all other respects, everything is the same. The ADP report on the change in the number of employees in the private sector provoked a fall in the dollar during the US trading session. After that, the pair went into a complete flat between the levels of 1.3785 and 1.3794 and nothing more interesting happened that day. Now let's deal with trading signals, which were also very few. The quotes crossed the Senkou Span B, Kijun-sen and 1.3747 lines at the very beginning of the European session, which were all located next to each other, afterwards it returned to Kijun-sen again, rebounding from it, and only after that did it move up. Traders had to work out these signals with a long position. And it should have been closed near the level of 1.3785, as further upward movement did not continue further. As a result, about 25 points could be earned on a long position. Not bad at all, considering that the pair's movements were far from ideal today.
Overview of the EUR/USD pair. September 2. All attention is on indicators of the state of the US labor market.
Overview of the GBP/USD pair. September 2. Coronavirus is not asleep and continues to pose a serious threat to humanity and the economy.
GBP/USD 1H
The pound/dollar pair continues its upward movement within the rising channel on the hourly timeframe. Yesterday, the bears failed to overcome the lower border of the channel, as well as the Senkou Span B and Kijun-sen lines. Therefore, the upward trend continues. However, we also pay attention to the fact that the pair did not surpass the important resistance area of 1.3785-1.3794 either, although there were two attempts. Thus, at the moment, further increase in quotes is in doubt. We continue to draw the attention of traders to the most important levels and recommend trading from them: 1.3677, 1.3747, 1.3785 - 1.3794, 1.3885. Senkou Span B (1.3739) and Kijun-sen (1.3741) lines can also be sources of signals. It is recommended to set the Stop Loss level at breakeven when the price passes in the right direction by 20 points. 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 scheduled in the UK, only minor ones in America on Thursday, September 2. Therefore, most likely, both major pairs will continue to remain in very narrow trading ranges today. The NonFarm Payrolls report will be published in America on Friday, and a lot really depends on it. If it turns out to be strong (above forecasts), it could dramatically change the mood of traders who may rush to buy up the US dollar. If the report turns out to be weak, it may give additional strength to the bulls, and the euro and the pound will receive new opportunities for growth.
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 120 points during the last reporting week (August 17-23). And the number of Buy contracts (longs) of a group of "non-commercial" traders decreased by only 2,000 during the same time. However, the number of Sell contracts (shorts) increased by 19,000. Therefore, something happened in the pound that has not yet happened to the European currency. The mood of large traders has officially changed to bearish, as now they have more open contracts to sell than buy. A bit unexpected. It turns out that major players reduced their net positions in both the euro and the pound in the last reporting week. Was it connected with the same expectations of hawkish rhetoric from Federal Reserve Chairman Jerome Powell, which was not destined to be voiced? One way or another, according to the Commitment of Traders (COT) reports, much more interesting prospects for a decline are opening up for the pound than for the euro. True, all other fundamental and technical factors continue to speak in favor of the dollar's decline, and not vice versa. Therefore, we believe that at this time it is necessary to rely on technical factors. This is the 1.3600-1.3666 area for the pound. A confident breakthrough will allow us to expect a succeeding decline in the pair's quotes. However, since Powell did not report anything that could support the US dollar, it will be difficult for the greenback to count on a new round of appreciation. We also remind you that the "factor of the Fed's cash infusions" continues to work against the dollar, which inflate the money supply and provoke an increase in inflation. In general, even with the readings of the COT reports, the further growth of the dollar is far from 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.
