GBP/USD 5M
The GBP/USD pair initially went down 40 points and then up 50 points on Monday. Fifty points of volatility is very, very small for the pound/dollar pair. Thus, both major pairs traded sluggishly and reluctantly on the first trading day of the week. Both pairs will receive important reports and foundation this week, so market participants now, perhaps, do not want to risk in vain. Several important publications will take place in the UK tomorrow. Nevertheless, several trading signals were formed yesterday and not all of them should have been worked out. Let's try to figure out what should have been done. The first buy signal was formed near the level of 1.4101 in the form of a rebound from it. It turned out to be blatantly false, and the long position brought traders about 11 points of loss. Afterwards, the prices surpassed the 1.4101 level on the second attempt, which was already a signal to sell, which should also be worked out, but with a short position. The closest level of 1.4080 was reached and the quote even surpassed it, but the breakthrough was false, so the short position had to be manually closed when the price settled above the level of 1.4080. As a result, this position brought a profit of about 13 points. As prices settled above 1.4080, this was another buy signal, which brought about another 25 points in profit, as the trade had to be manually closed at the end of the trading day. You shouldn't take action near the 1.4101 level, which was surpassed in the course of the upward movement, since the price did not rebound from it, but went beyond it. Therefore, it was necessary to just stay in the long positions. As a result, the bulls failed to bring the pair to the critical line.
Overview of the EUR/USD pair. June 15. The ECB is not going to wind down the PEPP program and the Fed is likely to follow suit.
Overview of the GBP/USD pair. June 15. A very important week for the pound. The pair can finally leave the horizontal channel.
GBP/USD 1H
The British pound continues to trade in the 1.4100-1.4220 horizontal channel on the hourly timeframe. Recently, the price has dropped below this channel three times, so its lower border can be moved to 1.4080. However, this does not change the essence of the matter, since the pair remains flat. Even rebounds from the channel's boundaries cannot be used as signals, since they are far from always clear. Thus, we believe that the pair may rise by 70-80 points by today or tomorrow. In technical terms, we continue to draw your attention to the most important levels and recommend trading from them: 1.4080, 1.4101, 1.400 and 1.4219. These levels have not changed for a long time, because the price continues to be in a limited range. Senkou Span B (1.4165) and Kijun-sen (1.4128) lines can also be sources of signals, but they are weak in the flat. 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. Important publications will begin in the UK on Tuesday morning. First, reports on the unemployment rate, the number of applications for unemployment benefits, as well as on average wages will be released. In addition, Bank of England Governor Andrew Bailey will deliver a speech. We believe that traders should pay the most attention to the unemployment reports and Bailey's speech. However, the report on the change in the volume of retail sales in the United States is also quite important. Thus, at the time when these events take place, sharp price reversals and increased movement are possible. You need to be prepared for this.
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 25 points during the last reporting week (June 1-7). However, in general, no one doubts the direction of the global trend is upward, and the recent weeks' movement has been an absolute flat. The latest Commitment of Traders (COT) report showed that professional traders closed approximately the same number of Buy (longs) and Sell (shorts) contracts. It is this moment that very clearly indicates what is happening now with the pound/dollar pair. However, in general, the pound continues to grow and cannot even really correct. At the same time, the size of the net position of the major players practically does not change. Changes in the net position have been insignificant since the beginning of March, which is shown by both the first and second indicators. Moreover, the pound continues to show growth, it simply does not commensurate with the bullish sentiment of non-commercial traders. Thus, we continue to talk about such a global factor as the injection of trillions of dollars into the American economy, which, from our point of view, is the main reason why the pound strengthens. Look at the previous section of the trend between October 2020 and March 2021. The pound gained 1,400 points, while the net positions of commercial and non-commercial groups of traders remained practically unchanged. That is, large players did not increase their long positions at this time. At the same time, the pound grew by 1400 points practically without a single pullback.
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.
