Analysis of GBP/USD 5M.
Moreover, the GBP/USD currency pair continued to rise on Tuesday. In addition, the character of this movement was entirely distinct from that of the EUR/USD pair. Most of the pound's price increase occurred during the European trading session when neither the US nor the UK released significant data, and no significant events occurred. As can be seen, both major pairs take advantage of every opportunity to grow. Specifically, the market seizes every opportunity to initiate more long positions. This market behavior means that fundamental and macroeconomic factors are currently irrelevant. On the hourly TF, we have already built the third trend line; the previous two did not cause a price reduction when they were surpassed. Hence, technical sell signals no longer have any weight. Even though there isn't much data to support the pound, the market always keeps buying.
Yesterday, two trading signals were generated. Before passing the level of 1.2458, the pair first passed the level of 1.2429. After the first signal was set, it started a buy transaction simultaneously because there was a short period of consolidation above the level. Hence, the pair rose almost 80 points, and the deal could be closed with a profit of at least 40 points. In other words, traders made a profit despite the absence of any sell signals.
The COT Report:
The British pound began to receive COT reports that were in step with the times. The most recent report available is from March 28. According to this report, the Non-commercial group closed 0.3 thousand buy contracts and initiated 3.3 thousand sell contracts. Thus, the net position of non-commercial traders has reduced by three thousand, although it continues to increase overall. The net position indicator has steadily increased over the past 7–8 months. Still, the mood of the major players has remained "bearish," and although the pound sterling is rising against the dollar (in the medium term), it is very difficult to answer why it does so. We cannot rule out the possibility that the pound's decline could accelerate soon. Technically, it has already begun, as the pound has not risen in three months, but the movement appears to be very flat. Furthermore, note that both main pairs are currently moving similarly. Still, the net position of the euro is positive, and it even shows that the higher momentum is about to end soon. In contrast, the net position of the pound is negative, allowing us to anticipate further growth. Yet, the pound has already risen by 2,100 points, which is a significant amount; without a significant downward correction, the continuation of the increase will be illogical. The non-commercial group has opened 52,000 sales contracts and 28,000 purchase contracts. We remain cautious about the long-term rise of the British pound and anticipate that it will decline.
Analysis of GBP/USD 1H.
On an hourly timeframe, the pound/dollar pair attempted to initiate a new downward trend, but to no avail. The market participants continue to purchase aggressively. There are still no reasons to purchase, but this does not preclude traders from doing so. Hence, the pair may keep growing for as long as it desires. The pair left the three-month side channel upon breaking the 1.2440 level. A new trend line has been established, which is also insignificant. We highlight the following significant levels on April 5: 1.1927, 1.1965, 1.2143, 1.2185, 1.2269, 1.2342, 1.2429-1.2458, 1.2589, 1.2659, and 1.2762. Additional signal sources include the Senkou Span B (1.2299) and Kijun-sen (1.2398) lines. These levels and lines can be "bounces" and "sums" of signals. It is advised to set the stop-loss level to breakeven when the price moves 20 points in the desired direction. The Ichimoku indicator's lines might move during the day, which should be considered when establishing trade signals. Also, the picture shows levels of support and resistance that can be used to determine how profitable a trade will be. On Wednesday, the United Kingdom and the United States will issue business activity indices. The ISM index in the United States is slightly more significant than the others. Still, it is unlikely to impact the sentiment of traders to the extent that they begin selling rather than purchasing.
Explanations of the illustrations:
The price levels of support and resistance (resistance and support) are depicted as thick red lines, close to which the price movement is likely to halt. They are not trading signal sources.
Kijun-sen and Senkou Span B are the lines of the Ichimoku indicator that have been shifted from the 4-hour to the hourly timeframe. Have robust lines.
Extreme levels are thin red lines from which prices have previously rebounded. These are trading signal generators.
Yellow lines represent trend lines, trend channels, and other technical patterns.
The first indicator on the COT charts is the net position size of each trading category.
On the COT charts, indicator 2 represents the net position size for the "non-commercial" group.
