22.01.202105:29 Forex Analysis & Reviews: Forecast and trading signals for GBP/USD on January 22. COT report. Analysis of Thursday. Recommendations for Friday


Exchange Rates 22.01.2021 analysis

Both linear regression channels are directed to the upside on the 15-minute timeframe. Thus, the pair can now fall to the 1.3680 level , after which it will either resume its upward movement or continue moving down to the critical line. There are no signs of ending the upward trend in the short term yet.


Exchange Rates 22.01.2021 analysis

If the EUR/USD pair has more or less corrected in recent weeks and is only now aiming for a new upward trend, then there was no correction for the GBP/USD pair, but the upward trend continues. Yesterday the pair's quotes surpassed the 1.3700 level on the fifth attempt. They could not go far up after surpassing the level, but overcoming in itself already makes it possible to count on the pair's succeeding growth. An upward channel has been formed, which now clearly limits the upward trend. Since the price rose by around 120 points during the previous day, having previously rebounded off the Kijun-sen line and the support area of 1.3606-1.3626, a new round of downward correction may begin now. Traders could open long positions according to the described signals. Now we should wait for the end of the correction and a rebound from the lower channel line. If a clear rebound does not happen, then the pair may try to drop to the critical line again, while maintaining the upward trend. It is hard to believe that the pair tested the 1.3700 level five times to go up another 40 points.

COT report

Exchange Rates 22.01.2021 analysis

The latest COT report, which came out strictly on schedule this time, showed the long-awaited sharp change in the mood of traders. Professional market participants opened more than 10,000 Buy-contracts (longs) and only 3,000 Sell-contracts (shorts). Thus, the mood of the "non-commercial" group, which, we recall, is considered the most important group of traders, has become much more bullish. In turn, this means that the upward movement may continue for the pound/dollar pair. And this conclusion completely coincides with the technical picture that is observed at this time. Thus, as we have warned more than once, any fundamental hypothesis must have specific technical confirmation. If they are not there, then no matter what the foundation is, the pair can continue to move without any response. It is not the foundation that drives the markets; the markets move themselves, but the technique visualizes the behavior of traders. Therefore, in the current situation, technique is prioritized.

Nothing interesting happened in Great Britain over the past day. However, as we can see, traders did not need any important information to resume buying the pound. Maybe the reason why the dollar fell yesterday was the US reports? However, nothing extraordinary was published in the US on Thursday. The only more or less significant report on applications for unemployment benefits showed the following figures: +900,000 primary and 5.054 million secondary. 900,000 is a lot, the number of new requests is almost a million for the second consecutive week. However, forecasts were even higher, and the pound rose all day, and not just after the release of this report. But the number of secondary applications has decreased compared to the previous week. Therefore, we can conclude that unemployment in the United States is still not growing, as one might have assumed a week earlier.

A report on retail sales will be released in the UK in the morning, and a little later - reports on business activity. All reports are not relevant at this time. We remind you that traders ignore 90% of macroeconomic statistics anyway. The trend in business performance in Britain is the same as in the European Union. Most likely, the service sector will remain below the key level of 50.0, and the manufacturing sector - above. However, this is exactly what might have been expected, given the third lockdown in the UK. Well, the pound still does not pay any attention to these numbers and this fundamental background. Thus, you should trade more on technical factors.

We have two trading ideas for January 22:

1) An upward channel has formed for the pound/dollar pair, so the trend is now upward. The price has reached and surpassed the 1.3712 level, now there may be a pullback. A rebound from the lower channel line can be used as a signal for new purchases with a target at the resistance level of 1.3841. Take Profit in this case will be up to 140 points. The target is quite distant, but the most important thing is to get a clear and strong signal. Also, a rebound can occur from the critical line (1.3632).

2) Sellers are again in the shadows and once again failed to start a new downward trend. Thus, you should consider sell positions when the price settles below the Kijun-sen line (1.3632) while aiming for the Senkou Span B line (1.3580) and the support level of 1.3452. Take Profit in this case will be up to 150 points. We also remind you that there is very little logic in the movement of the pound/dollar pair now.

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.

*Phân tích thị trường được đăng tải ở đây có nghĩa là để gia tăng nhận thức của bạn, nhưng không đưa ra các chỉ dẫn để thực hiện một giao dịch.

Paolo Greco,
Chuyên gia phân tích
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