The GBP/USD pair also moved quite well on September 17, but still far from its usual volatility indicators. This time the pair went from the high to the low of the day by 89 points. The market was dominated by a flat in the first half of the day, and a very bad flat, when the price is constantly jumping up and down, while staying within a very narrow horizontal channel. Macroeconomic reports did not have any special influence on the pair's movement. A report on retail sales for August was published early in the morning in the UK, which turned out to be significantly weaker than forecasted. Nevertheless, the pound, apart from a 15-point decline in the flat, did not react to this report in any way. The markets also did not react to the consumer sentiment index from the University of Michigan, because if there was a reaction, the dollar would have to decline, not rise. As a result, two sell signals were formed in the first half of the day, when the price bounced off the Senkou Span B line. Both of these signals were very complex, albeit accurate. The fact is that there are two extremum levels below the Senkou Span B line, which form the support area of 1.3785-1.3794. Therefore, ideally, it would be necessary to wait for the price to overcome this area before opening short positions, because a rebound could follow from this area. In reality, the price just spent six hours in this area. Therefore, it was best to open positions after overcoming the level of 1.3785. There were two such moments, and in any case, one short position should have been opened, which was not manually closed, since the price did not manage to go above the Senkou Span B line. As a result, a short position should have been opened at the level of 1.3777, and closed manually in the late afternoon or near the level of 1.3732, which was nevertheless worked out. The profit ranged from 30 to 45 points.
The GBP/USD pair continues to move down and a downward trend line has been formed on the hourly timeframe. Now the downward trend may persist for some time, but a lot will depend on the results of the Federal Reserve meeting, which will become known on Wednesday. It is possible that now the markets are buying the dollar "in advance", but after the Fed meeting, their mood may change to the opposite. We also continue to draw the attention of traders to the most important levels: 1.3677, 1.3732, 1.3785 - 1.3794, 1.3886. Senkou Span B (1.3808) and Kijun-sen (1.3822) lines can also be sources of signals. It is recommended to set the Stop Loss level at breakeven when the price passes 20 points in the right direction. The Ichimoku indicator lines can move during the day, which should be taken into account when looking for trading signals. There are no major publications or major events scheduled for Monday, September 20 in the UK and the United States. Thus, in theory, volatility can be low again. But the markets may continue to trade the pair in line with their own expectations of the Fed meeting and the winding down of the QE program. And these expectations are positive...
We also recommend that you familiarize yourself with the forecast and trading signals for the EUR/USD pair.
The GBP/USD pair did not gain or lose a single point during the last reporting week (September 7-13). Recall that in recent weeks, according to Commitment of Traders (COT) reports, the mood of the major players has changed to bearish. The green line of the first indicator in the chart above (denotes a change in the net position of the "non-commercial" group) has dropped below zero. This was until the last COT report, which came out on Friday, September 17th. At that time, we already questioned the continuation of the British currency's decline. Simply because the pound, like the euro, has been correcting for more than six months against the global upward trend. And during this time, it managed to correct by 23.6%. This is very small and certainly does not look like a new downward trend is forming. And the latest COT report did show that any expectations of further dollar growth may be premature. Despite the fact that at the end of the week the dollar rose against both the pound and the euro, during the reporting week, major players immediately opened 15,000 buy contracts (longs) and closed the same number of sell contracts (shorts). That is, the net position for the "non-commercial" group of traders has grown by 30,000 at once. Considering that until the last COT report, only 30,000 buy contracts (longs) were opened for commercial traders, such changes are global. Thus, in the case of the pound, the chances of a further fall are much less than with the euro. Moreover, both the pound and the euro have corrected against the upward trend by 600 points. But it is less than 23% for the pound, and it is about a third for the euro.
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.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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