GBP/USD 5M
The GBP/USD pair traded very similarly to the euro on Monday, April 5. The macroeconomic background for the pair was the same as for the euro/dollar, and the global fundamental factors were supplemented only by the speculative factor, but in general they were also the same. And so it is not surprising that both the euro and the pound began to rise simultaneously against the dollar. We have long warned that all the trillions of dollars that Congress and the Federal Reserve are pouring into the US economy will not go unnoticed. It seems that now is the time when the dollar will start to fall in price again. No important reports from the UK yesterday, meanwhile, the index of business activity in the US service sector was ignored (marked with the number "1"). Now let's take a look at all the deals of the day that traders could open according to our recommendations. As usual, there was a flat during the evening. But with the opening of the European session, the quotes fell to the extremum level of 1.3812 and clearly rebounded from it. Traders need to pay attention to this rebound in order to understand exactly what a clear signal is. After the rebound, traders should have opened long positions with the nearest targets, the Senkou Span B line (1.3836) and the extremum level of 1.3846. These levels were easily reached and brought about 27 points of profit, and without even giving market participants time to think about whether it was time to close the long positions, the quote immediately surpassed the 1.3846 level, which allowed them to remain in long positions with the next target level at 1.3885 , which was reached at the beginning of the US session. The quote also surpassed it, which could have allowed you to remain in the longs, but since the price had already grown quite strongly by this moment, it was possible to take a profit, which in total would have reached around 66 points.
GBP/USD 1H
We can see that the pound/dollar pair maintains an upward trend on the hourly timeframe, as evidenced by the upward trend line. This trend was worked out yesterday. The 1.3812-1.3846 horizontal channel, in which the pair trampled on last Friday, released quotes beyond its limits, which led to restoring the upward movement. As a result, the resistance level of 1.3883 was reached. Given the strength of Monday's growth, the bulls could continue to attack the two major pairs for a couple of days in a row. Moreover, there are practically no important events and publications this week. As we have said many times, it is quite possible that the dollar has entered a new long segment of its own decline. In general, we continue to recommend trading from important levels and lines, when rebounding from them and overcoming them. On Tuesday, neither the US nor Britain will publish any reports, no important fundamental events are planned. Thus, we are waiting for a slight correction and for it to continue moving up. The most important levels and lines: 1.3846, 1.3952 and Senkou Span B line (1.3836). Signals can be rebounds and once levels and lines are surpassed. Do not forget about setting a Stop Loss order at breakeven if the price moves 15-20 points in the right direction. The nearest level/line is always used as targets (exceptions - if the target is too close to the signal).
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 only 37 points during the last reporting week (March 16-22). However, this fall is as conditional as the previous week's growth. The pair travels around 37 points in an hour. Thus, it is impossible to say that the pair sharply dropped over the reporting week. But the Commitment of Traders (COT) report talks about quite serious changes. Non-commercial traders closed 3,200 buy contracts (longs) and opened 4,400 sell contracts (shorts) during the reporting week. Thus, the net position for the pound immediately decreased by 7,600, which is quite a lot and reflects that the bullish mood has significantly weakened among professional traders. Thus, despite the fact that the pound shows a not so strong fall (which is clearly seen in the chart), while the COT reports that more eloquently signal the end of the upward trend. However, an assumption should also be made here. The green and red lines of the first indicator have often changed the direction of movement over the past 6-8 months, so here it just cannot be said that the end of the upward trend has been brewing for a long time. In general, the pound's situation is more complicated and confusing than the euro's. Considering the fact that much will depend on the US economy, both the euro and the pound can resume growth.
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.
