GBP/USD 5M

The GBP/USD currency pair followed the euro's example on Tuesday and, after news of the absence of de-escalation of the military conflict in Ukraine, started a new powerful fall. Despite the fact that several reports were published in the UK and the US over the past day, they had no effect on the pair's movement. The indices of business activity in the manufacturing sectors of the United States and Britain synchronously turned out to be better than forecasts, but what does it matter if the pair moved in only one direction for most of the day? Thus, we are forced to state that geopolitics continues to rule the market. And, unfortunately, nothing is likely to change in the near future.

Trading signals were almost perfect on Tuesday. First of all, there were not many of them. Secondly, the pair has been trending for most of the day. Thirdly, not a single buy signal was formed, which in any case should have been ignored due to the geopolitical background. Thus, the first short position should have been opened near the level of 1.3439, from which the price bounced with minimal error. Subsequently, the price dropped to the level of 1.3367 and overcame it. By the evening, the pair failed to reach the level of 1.3276, so the deal should have been closed manually in profit of about 100 points. In general, we can say the following. The market may be in a state of storm for a very long time. Until geopolitical tensions begin to subside. All this time you need to be ready for absolutely any movements. It should not be assumed that only the dollar will grow now.

COT report:

The latest Commitment of Traders (COT) report on the British pound showed an increase in the bearish mood among professional traders. Last week, for the first time in several months, the number of long positions from the non-commercial group exceeded the number of short positions, but this picture was not observed for long. This week it already became known that non-commercial traders started closing longs again and their total number fell to 44,000, while the total number of shorts remained at 48,000. Thus, formally, the mood among the major players is bearish now. However, all events of a geopolitical nature were not included in the latest COT report. That is, the next COT report may show a much stronger change in the net position of each group of traders and a sharp change in mood. In addition, the first indicator in the chart above shows that the mood of commercial and non-commercial traders is now essentially "neutral", since both lines (red and green) are near zero. Thus, although in recent months there has been a tendency to reduce short positions and build up long ones, now there is a complete balance in the market, and geopolitics can affect the balance of power and may affect it in the next few weeks/months. Therefore, no conclusions can be drawn based on COT reports now. Or it doesn't make sense. Unfortunately, the whole world is in tension right now, and comprehensive sanctions will affect the global economy and the mood of traders and investors.

We recommend that you familiarize yourself with:

Overview of the EUR/USD pair. March 2. The euro currency has flown down again, the "swing" continues.

Overview of the GBP/USD pair. March 2. Has the pound calmed down, or is it a lull before a new storm?

Forecast and trading signals for EUR/USD on March 2. Detailed analysis of the movement of the pair and trading transactions.

GBP/USD 1H

On the hourly timeframe, the pair has consolidated below the triangle we wrote about yesterday. Thus, the direction of movement in which the pair intends to move in the coming days is determined. Most likely, the previous local low will not remain so for a long time. The situation in Ukraine is not improving, and macroeconomic statistics (which already in most cases supports the dollar) are simply ignored by traders. On March 2, we highlight the following important levels: 1.3170-1.3185, 1.3276, 1.3367, 1.3439, 1.3489, 1.3537, 1.3572. The Senkou Span B (1.3457) and Kijun-sen (1.3442) 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 interesting events and publications scheduled for Wednesday in the UK. You should only pay attention to the speech of Federal Reserve Chairman Jerome Powell. He is likely to touch upon the topics of monetary policy, the key rate, inflation and the geopolitical conflict in Eastern Europe. His comments may affect the market. But only if the geopolitical background on Wednesday is not stronger and more important.

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.