5M chart of GBP/USD

GBP/USD continued its bullish correction on Thursday, and by the end of the day, it had worked off the critical line. It did not manage to overcome this line, which gives hope for restoring the fall on Friday. However, keep in mind that today almost everything will depend on the U.S. macro data. As a whole, the British pound continues to trade in a "swinging" mode. While earlier it was a swing in the horizontal channel, now it is a swing with a downward bias. If the U.S. data turns out to be weak today, the pair might go up, which will lead us to a "swing". Reminder: the pair managed to get out of the horizontal channel (on the 4H-chart, not on the 24H-chart), because of Federal Reserve Chairman Jerome Powell's speech on Tuesday. Apart from that, there was nothing to support the dollar this week. That said, in my opinion, the dollar should continue to rise, as most of the fundamentals are working in its favor.

Speaking of trading signals, they weren't great at all. Two buy signals were formed near 1.1874, and traders could open a position on them. After that, the price reached the next target, the critical line and 1.1927, where it could make a profit. However, the target was very close, so it was not possible to make much profit. However, for a completely empty day in terms of macroeconomics and fundamentals, this result was quite good.

COT report:

The latest COT report on GBP/USD dates back to February 7. Due to a technical glitch, there have been no fresh reports for about a month. Naturally, analyzing outdated reports is of no use. Anyway, that is better than nothing at all. According to the latest data, non-commercial traders opened 10,900 long positions and 6,700 short ones. The net position grew by 4,200. The net non-commercial position has been bullish in recent months although sentiment remains bearish. The pound has been on the rise against the greenback for some unknown reason. We should not rule out the possibility of a strong decline in price in the near term. Technically, it has already started to decline although it seems to be a flat trend. In fact, the movement of GBP/USD is now akin to that of EUR/USD. At the same time, the net position on EUR/USD is positive, signaling the upcoming end of the bullish impulse. Meanwhile, the net position on GBP/USD is negative. Non-commercial traders now hold 61,000 sell positions and 47,000 long positions. There is still a gap. We are still skeptical that the pair will be bullish in the long term and expect a steep drop.

1H chart of GBP/USD

On the one-hour chart, GBP/USD collapsed on Tuesday, but it is already recovering. A new downtrend line has been formed and the price is located below the Ichimoku indicator lines. That's why so far everything says that the downward movement will continue. However, today's macroeconomic background might have a strong influence on the market mood, so by the end of the day the pair might be anywhere. On March 10, it is recommended to trade at the key level of 1.1486, 1.1645, 1.1760, 1.1874, 1.1927, 1.1965, 1.2143, 1.2185, 1.2269. The Senkou Spahn B (1.2030) and Kijun Sen (1.1930) lines can also generate signals. Rebounds and breakouts from these lines can also serve as trading signals. It is better to set the Stop Loss at breakeven as soon as the price moves by 20 pips in the right direction. The lines of the Ichimoku indicator can change their position throughout the day which is worth keeping in mind when looking for trading signals. On the chart, you can also see support and resistance levels where you can take profit. On Friday, the UK will publish not the most important Industrial Production and GDP reports for January. In America, we have the important NonFarm Payrolls and unemployment data. The market might show a significant reaction to the data, but there could be some movement in the morning as well.

Indicators on charts:

Resistance/support - thick red lines, near which the trend may stop. They do not make trading signals.

Kijun-sen and Senkou Span B are the Ichimoku indicator lines moved to the hourly timeframe from the 4-hour timeframe. They are also strong lines.

Extreme levels are thin red lines, from which the price used to bounce earlier. They can produce trading signals.

Yellow lines are trend lines, trend channels, and any other technical patterns.

Indicator 1 on the COT chart is the size of the net position of each trader category.

Indicator 2 on the COT chart is the size of the net position for the Non-commercial group of traders.