GBP/USD 5M

The GBP/USD currency pair moved quite differently from the EUR/USD pair on Monday. This is quite strange, since the fundamental background for both pairs was about the same. Closer to the afternoon, Bank of England Chairman Andrew Bailey made a speech, but there was nothing disappointing in his speech. For example, he said that the UK financial system is coping well with the geopolitical situation in Eastern Europe. According to him, all commodity markets continue to function normally, but liquidity conditions have worsened in foreign markets. Despite the fact that there is no reason to panic at this time, the escalation and development of the military conflict in Ukraine can lead to serious consequences for world markets. Thus, Bailey expressed certain concerns, but they hardly concerned only British systems and the market. Therefore, the pound's fall in the afternoon does not look unambiguously logical.

But the trading signals that were formed on Monday look very good. The price bounced from the extreme level of 1.3158 three times. Traders could work out each of these signals. The first sell signal did not bring profit, but it did not bring a loss either. The price could not go down 20 points, sufficient to set a Stop Loss to breakeven. The price returned to the level of 1.3158, rebounded once again, and at that time traders had to stay in short positions that were already open. The second time the price went down more than 20 points, so the Stop Loss was set. According to this order, the transaction closed at breakeven. The third sell signal also had to be worked out, since all three signals were strong and clear enough, and no losses were received on them. For the third time, the price went down about 80 points, but the short position should have been closed above the level of 1.3087. It was the consolidation above this level that served as a buy signal or, in our case, a signal to close short positions. The profit was about 50 points.

COT report:

The latest Commitment of Traders (COT) report on the British pound showed a new strengthening of the bearish mood among professional traders. However, in general, the mood of the major players has changed too often in recent months, which is clearly seen by the two indicators in the chart above: they are constantly changing the direction of their movement. At the moment, the number of open long positions is less than the number of short positions by almost 37,000. Although three weeks ago their number was almost the same. Thus, the non-commercial group has dramatically changed its mindset, but at the same time it is still not possible to draw any medium-term conclusions now. Firstly, as already mentioned, the mood of major players changes too often, so it is impossible to identify any trend. Secondly, at this time, not only the demand for the pound, which is displayed in the COT reports, matters, but also the demand for the dollar. Thirdly, the geopolitical factor can have an unexpected and sudden impact on the movement of the pound/dollar pair. Therefore, at this time, we can assume a new medium-term fall of the British pound without COT reports. The pound may even rise by 200-300 points at first as part of the next round of correction, and only after that it will rush down again. Non-commercial traders reduced their net position by 8,000 contracts during the reporting week.

We recommend to familiarize yourself with:

Overview of the EUR/USD pair. March 29. The world needs peace. The euro currency also needs peace.

Overview of the GBP/USD pair. March 29. The British pound also did not remain in thought for long. A new fall has begun.

Forecast and trading signals for EUR/USD on March 29. Detailed analysis of the movement of the pair and trading transactions.

GBP/USD 1H

The technical picture on the hourly timeframe looked quite strange for several days, the trend movement on Monday put all the dots over the "and". After the price settled below the ascending channel, we expected a new fall in the pound, but it started with a two-day delay, which could initially confuse traders. However, in the end, the pair still fell to the level of 1.3087 and now it is necessary to overcome this level for further decline. On March 29, we highlight the following important levels: 1.3000, 1.3087, 1.3158, 1.3222, 1.3273. The Senkou Span B (1.3148) and Kijun-sen (1.3180) 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 important events scheduled for Tuesday in the UK and the United States. Only a few minor reports will be published, which are unlikely to provoke a market reaction. However, as Monday showed, the pound can fall for no good reason.

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.