25.11.202003:46 Forex Analysis & Reviews: Forecast and trading signals for GBP/USD on November 25. COT report. Analysis of Tuesday. Recommendations for Wednesday


The GBP/USD pair moved identically to the EUR/USD pair on Tuesday, November 24. First, the correctional movement after yesterday's fall, then it pulled back down to the Kijun-sen line, rebounded from this line and went back to moving up. The only difference is that the GBP/USD pair is in a rising channel, while EUR/USD is in a horizontal channel. However, we only built the rising channel today. Before that, we had an upward trend line, and the price settled below it, but it immediately went back to moving up. We hope that there will be no such story with the channel. In any case, the upward trend is now visible to the naked eye. And the fact that the price failed to gain a foothold below the critical line twice speaks in favor of maintaining a bullish mood among traders. Therefore, we expect an upward movement at this time. Bears will be able to enter the game only if the price settles below the rising channel and below the critical line.


Exchange Rates 25.11.2020 analysis

Both linear regression channels are still directed to the upside on the 15-minute timeframe, so there are no signs of ending the upward trend at this time, despite it pulling back the day before yesterday. The Kijun-sen line also speaks in favor of maintaining the upward trend, below which the pair failed to gain a foothold twice.

COT report

Exchange Rates 25.11.2020 analysis

The GBP/USD pair rose by 25 points in the last reporting week (November 10-16), although the volatility was quite high during this time period. However, the Commitment of Traders (COT) report has not provided us with any important information that could help in forecasting and trading for several weeks now. Recall that the red and green lines must move away from each other or sharply change the direction of their movement, so that we can conclude that one trend ends and another begins. In recent months, both lines regularly change their direction, which indicates the absence of signals based on COT reports. What can we say about the most important group of non-commercial traders? This group opened 533 contracts to buy the pound and 616 contracts to sell during the reporting week. Therefore, it doesn't even make any special sense to calculate the change in the net position or the amount by which the attitude of professional traders has changed. A little more than 1000 contracts per week is very little. Therefore, in essence, there are no changes. What do we end up with? There are no changes, and the general picture of things does not make it possible to predict any definite development of the situation. So now it is better to pay more attention to technique and foundation.

The fundamentals for the British pound were meager on Tuesday. No important news or reports. Markets are already fed up with reports that negotiations for a trade deal have resumed, and the parties are still unable to resolve all their differences on the most fundamental issues. And so, although the pound continues to be victorious, take note of the fact that there isn't anything particularly positive coming from the UK. Moreover, Bank of England Governor Andrew Bailey draws the attention of the British government to the fact that without a trade deal, the British economy will suffer very much, much more than from the coronavirus pandemic. We mentioned this before, now this idea was voiced by Bailey himself.

No macroeconomic reports set for release for the UK today. Now, in principle, there is nothing to expect from Great Britain. Lockdown, Prime Minister Boris Johnson has assured, will end on December 2, but it will still strike a blow to the economy. Of course, traders should continue to monitor possible news regarding the negotiations between Brussels and London, however, to be honest, this topic is already exhausted, and we have not received important news for a long time. However, there will still be quite interesting macroeconomic reports from America. Therefore, traders are advised to review US reports and pay close attention to technical factors.

We have two trading ideas for November 25:

1) Buyers for the pound/dollar pair continue to hold the initiative in their hands and did not let the price go below the Kijun-sen line (1.3295). Thus, we advise you to trade upwards while aiming for the resistance levels of 1.3397 and 1.3483 as long as the price is within the rising channel and above the critical line. Take Profit in this case will be from 40 to 120 points.

2) Sellers failed to go below the critical line yesterday. If the price settles below the Kijun-sen line (1.3295) and below the rising channel, you are advised to sell the pound/dollar pair while aiming for the Senkou Span B line (1.3201). Take Profit in this case can be up to 80 points.

Forecast and trading signals for EUR/USD

Explanations for illustrations:

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.

Paolo Greco,
Analytical expert of InstaForex
© 2007-2022
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