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GBP/USD 5M
The GBP/USD pair was trading very volatile on July 13. It passed around 110 points from the low to the high of the day. Quotes fell by 60 points immediately after the US inflation report was published. However, the pound clearly had a tendency to fall during the first half of the day. However, this gravitation cannot be called a trend. In the last week, neither the pound nor the US dollar can clearly determine the further direction of movement, and the pair is moving mostly sideways. In principle, all macroeconomic and fundamental factors of the past day for the pound/dollar pair were the same as for the euro/dollar pair. Bank of England Governor Andrew Bailey delivered a speech in the morning, but he did not touch upon the topics of economics and monetary policy. Thus, traders had nothing to react to during his speech. Now let's move on to trading signals. The first one was formed during the European trading session, but I can't call it precise and clear. The price crossed the Senkou Span B line and the extremum level of 1.3859, after which it moved exactly along these lines for several hours. Thus, traders could formally open short positions, however, before the US inflation report was published, they had to be manually closed (which would not bring any profit or loss) or set Stop Loss higher than Senkou Span B (which would have allowed to earn about 45 points ). All further signals should not have been worked out, since they were formed immediately after an important report was released, after which the price sharply fell by 60 points.
Overview of the EUR/USD pair. July 14. The euro is sinking in the abyss of traders' reluctance to trade the main currency pair.
Overview of the GBP/USD pair. July 14. US inflation continues to rise. UK authorities will lift the quarantine on July 19.
GBP/USD 1H
There is still no trend line or channel on the hourly timeframe, and the pound's movements look very unusual. There is no trend, so trading on the hourly timeframe is extremely difficult right now. Since the price surpassed the previous local high (1.3898) a couple of days ago, there were certain hopes that the upward movement would continue. However, we see that the bulls failed to develop this movement and the quotes went down again. Overall, the pound/dollar pair is still the most confusing currency pair at this time. In technical terms, we continue to draw your attention to the most important levels and recommend trading from them: 1.3731, 1.3800, 1.3859 and 1.3898. Senkou Span B (1.3834) and Kijun-sen (1.3825) lines can also be sources of signals. It is recommended to set the Stop Loss level at breakeven when the price passes 20 points in the right direction. The Ichimoku indicator lines can move during the day, which should be taken into account when looking for trading signals. The UK inflation report will be released on Wednesday, which could also provoke a rather strong market reaction. However, everything will depend on how much inflation rises or falls. Do recall that yesterday's US inflation report sharply differed from forecasts, therefore there was a very strong movement after it was released. Federal Reserve Chairman Jerome Powell will deliver a speech in the evening, which can also cause a strong movement in the market for all pairs in which the dollar is present.
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 35 points during the last reporting week (June 29-July 5). However, Friday's upward gains in the British currency were not included in the latest published Commitment of Traders (COT) report. Thus, we cannot yet know if the mood of the major players has become more bullish over the past few trading days. As a reminder, COT reports are released with a three-day delay. However, even according to the latest published COT report, we can conclude that the group of "non-commercial" traders has become more bullish. Professional traders opened almost 5,000 buy contracts (longs) and almost 2,000 sell contracts (shorts) during the reporting week. Thus, the net position of this group of traders increased by 3,000 contracts. The total number of open purchase contracts also exceeds the number of sales contracts. Therefore, the British currency, according to COT reports, has an excellent chance of resuming the upward trend. Moreover, global technical and fundamental factors also speak in favor of this. The indicators are now showing complete uncertainty. On the one hand, the green and red lines (net positions of the "non-commercial" and "commercial" groups) are approaching each other, which indicates the end of the trend. On the other hand, when the pound was actively growing, these lines did not move away from each other, which suggests the presence of external important factors that affect the supply and demand of the dollar and the pound. The second indicator shows that the net position of professional traders has been declining since March, but their mood is still bullish.
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.
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