GBP/USD 5M
The GBP/USD pair also started a new strong upward movement on Monday, April 19, which probably no one expected. We have repeatedly warned that the pound continues to be influenced not only by the fact that the US economy is filled with dollars, but also due to the speculative factor, which also supports the British currency. Actually, the dollar should have continued to depreciate on Monday. More signals were generated for the pound/dollar pair than the euro/dollar pair, and they managed to earn more on them, which is pleasing. The first signal was formed at the beginning of the European trading session - surpassing the extremum level of 1.3846. The price settled above this level, stomped around it for about two hours, without making any attempt to consolidate below it, and resumed its upward movement, having reached the nearest target level at 1.3914. A trader would have earned 56 points on this long position. This level was surpassed, so long positions could be left open with the next target - the extremum level of 1.3952, but the quote surpassed this level as well, so the final target was the 1.3998 level. As a result, traders could earn up to 120 points on yesterday's upward movement. Take note that macroeconomic statistics and important news were not released yesterday. Considering that the dollar collapsed simultaneously against the euro and the pound, the reason was precisely found in the dollar, and not in European currencies.
GBP/USD 1H
The technical picture on the hourly timeframe does not require any explanation at all. There is a clear upward movement, and yesterday there was a strong increase. The price has already overcome 2 of 3 resistance levels on Monday, only the 1.4062 level remains at the top. The bulls may have problems surpassing the 1.3998 level, which practically coincides with the 1.4000 psychological level. On the other hand, if it is overcome, then the chances of further moving up will increase even more. As you can see, traders do not need local recharge in the form of statistics or foundation in order to continue to buy the pair. Two factors, which we have repeatedly voiced, are quite enough for the dollar to drop. Unemployment, wages and jobless claims are set to be published in the UK on Tuesday. However, we believe that these reports will not have any impact on the pound/dollar pair's movement. Trading from levels and lines remains a very important aspect. Signals will be generated when the pair bounces from them or if it achieves a breakthrough. The most important levels for today are 1.4080, 1.3998 and 1.3914. Senkou Span B (1.3794) and Kijun-sen (1.3841) lines are also important, and signals can also form around them. As before, you are advised to set the Stop Loss level at breakeven when the price passes 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 160 points during the last reporting week (April 6-12). The chart clearly shows how strong the current downward correction is! Recall that professional traders have been actively reducing both buy and sell orders over the past 6-8 weeks. On February 23, around 69,000 were opened for the first and around 34,000 for the latter, then as of April 6, 44,000 Buy-contracts (longs) were opened, and 25,700 for Sell (shorts). Thus, in general, the ratio between longs and shorts has not changed. Only the number of contracts that were opened by the non-commercial group has changed. Hence the conclusion: the bullish mood persists among professional traders, but in general, fewer and fewer speculators want to deal with the "unbalanced" pound. Basically, the behavior of non-commercial traders is shown by the indicators under the main chart. The first one, which shows the change in the net positions of the three categories of traders, shows a constant change in direction, constant intersections of lines. And this is despite the fact that there has been a steady upward trend in the last 12-13 months, which does not cause any doubt. It turns out that there is a trend and it is strong, but the most important category of traders does not buy the pound in huge amounts. Moreover, the second indicator shows that non-commercial traders have been increasing their purchases and sales in the last six months. That is, there was no clear bullish mood. This only proves the fact that the pound and the euro grew in the last year on the factor of increasing the money supply in the United States. That is, big players traded in accordance with their interests and goals, but their deals were blocked by the infusion of trillions of dollars into the US economy. Well, in the reporting week, non-commercial traders began to re-open buy contracts (longs) at around 7,200. Less than a thousand sales contracts were opened. It seems that the major players are starting to believe in the growth of the "bitcoin-like" pound.
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.
