GBP/USD 5M

The GBP/USD currency pair tried to hold off from a new fall for some time on Thursday, but it ultimately failed. The price tried to settle below the level of 1.3367 four times and in the end it managed to do it. Thus, despite the fact that the entire macroeconomic background was ignored yesterday, traders still found grounds for new long positions on the US currency. However, there is no need to look for them now. Geopolitics supports the dollar's growth, the Federal Reserve's willingness to raise the rate at almost every meeting in 2022 - too. Thus, the British currency now has very little chance of growth. It can only count on technical corrections that happen from time to time.

Four signals were generated on the 5-minute TF. Everything is near the level of 1.3367. Actually, this is a sign of a flat, but a flat was not observed yesterday. The pair bounced three times from the level of 1.3367, forming buy signals. However, only one long position should have been opened, since the price never went up even 20 points, which were necessary to place a Stop Loss order at breakeven. Thus, as a result, the transaction closed at a loss when the price settled below the level of 1.3367 and below the critical line. According to the same signal, it was necessary to open short positions, but in the end the price could not really continue the downward movement, having passed only 25 points, and even then at the most. As a result, traders could make a small profit on this transaction, but it was enough at most to cover the loss on the first transaction.

COT report:

The latest Commitment of Traders (COT) report on the British pound showed an increase in the bearish mood among professional traders. Last week, for the first time in several months, the number of long positions from the non-commercial group exceeded the number of short positions, but this picture was not observed for long. This week it already became known that non-commercial traders started closing longs again and their total number fell to 44,000, while the total number of shorts remained at 48,000. Thus, formally, the mood among the major players is bearish now. However, all events of a geopolitical nature were not included in the latest COT report. That is, the next COT report may show a much stronger change in the net position of each group of traders and a sharp change in mood. In addition, the first indicator in the chart above shows that the mood of commercial and non-commercial traders is now essentially "neutral", since both lines (red and green) are near zero. Thus, although in recent months there has been a tendency to reduce short positions and build up long ones, now there is a complete balance in the market, and geopolitics can affect the balance of power and may affect it in the next few weeks/months. Therefore, no conclusions can be drawn based on COT reports now. Or it doesn't make sense. Unfortunately, the whole world is in tension right now, and comprehensive sanctions will affect the global economy and the mood of traders and investors.

We recommend that you familiarize yourself with:

Overview of the EUR/USD pair. March 4. Jerome Powell failed to disappoint the market. The dollar is rising again.

Overview of the GBP/USD pair. March 4. Britain continues to exert sanctions and pressure on Russia.

Forecast and trading signals for EUR/USD on March 4. Detailed analysis of the movement of the pair and trading transactions.

GBP/USD 1H

The "double bottom" pattern is clearly visible on the hourly timeframe. However, after it formed, the price has already adjusted, but could not even reach its local high near the level of 1.3439. Thus, today there may be a third attempt to overcome the level of 1.3273. Geopolitics is now clearly stronger than "technique", so we expect to overcome the level of 1.3273. We highlight the following important levels on March 4: 1.3170-1.3185, 1.3273, 1.3367, 1.3439, 1.3489, 1.3537, 1.3572. The Senkou Span B (1.3457) and Kijun-sen (1.3353) lines can also be signal sources. Signals can be "bounces" and "breakthroughs" of these levels and lines. It is recommended to set the Stop Loss level to breakeven when the price passes in the right direction by 20 points. The lines of the Ichimoku indicator can move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels on the chart that can be used to take profits on transactions. Nothing interesting is planned for Friday in the UK. The most important Nonfarm report will be released in the United States on this day, which almost always provokes the reaction of traders. Therefore, we are counting only on this report. However, its value must differ from the forecast value in order for a reaction to follow.

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.