Latest COT report (Commitments of Traders). Weekly outlook for GBP/USD

The COT report (Commitments of Traders dated 08/04/20) for the pound showed a decline in open interest (176728 against 178912). It also follows from the report that all the leading groups of large players in the last reporting period reduced their net positions (Non-Commercial pp 14727 (- 10682); Commercial pp 12441 (- 15964); Dealer Intermediary pp. 28024 (- 16920)). This state of affairs led not only to another reduction in the total position, but also allowed to change its direction. Now, the pound has a 1.3% advantage on the side of short positions (84.1% long - 85.4% short).

The main conclusion

The change in the general direction and priorities at the end of last week was reflected. Further preservation of the tendency in the behavior of large players can lead not only to the formation of another downward correction, but also to become the beginning of more global and long-term changes.

Technical picture

Technical analysis shows the inception of a downward correction, which is now using the daily short-term trend and the support of the weekly cloud as support. Maintaining the daily gold cross and working in the bullish zone of the relative weekly Ichimoku cloud will preserve the prospects and opportunities for bulls, whose main task is to restore the upward trend (1.3185). Loss of the daily short-term and return to the weekly cloud (1.2941) will form a priority for the development of a downward correction. The final borders of the daily golden cross (Kijun 1.2823 and Fibo Kijun 1.2723) and the lower border of the weekly cloud (1.2736), strengthened by the weekly Tenkan (1.2718), will become the reference points for the correction.

On the lower time frames, the pair went down below the key H1 levels - 1.3068-91 (central Pivot level + weekly long term trend). The work below the levels provides some preponderance of the players for the decline, their further prospects within the day 1.3008 (Friday's low) - 1.2986 (S1) - 1.2926 (S2) - 1.2844 (S3). A consolidation above the levels (1.3068-91) will swing the scales on H1 in favor of upside traders, whose main task will be to restore the upward trend (1.3185), the nearest resistance can be noted today at 1.3228 (R1).

Ichimoku Kinko Hyo (9.26.52), Pivot Points (Classic), Moving Average (120)