GBP/USD 5M
At first glance, the GBP/USD pair traded in approximately the same way as on Tuesday. That is, in a downward direction. However, the very nature of the movements during the day was somewhat different. Now we will figure out what was wrong. In the meantime, take note that the pound fell by another 100 points or so by the end of the day. Considering that macroeconomic reports from either the US or the UK were not published, and the speeches of Federal Reserve Chairman Jerome Powell and Bank of England Governor Andrew Bailey were scheduled for the evening, the foundation and macroeconomics did not affect the pound/dollar in any way. Thus, there remains only one conclusion: the British currency continued to fall against the background of the chaos that is now happening in Great Britain. Recall that, according to various sources, from 75% to 90% of gas stations in the country have sold out all the fuel and are now empty. The drivers are lining up (they were lining up as long as the gasoline was still at the gas station) almost in kilometer lines when rumors appeared that due to a shortage of truck drivers, interruptions in the supply of gasoline might begin. As soon as motorists found out, they immediately rushed to buy up all the gasoline available to them, and it really ran out. Only much faster than previously planned. And since the problem with truck drivers is really acute in the country, there is no more gasoline at the gas station. All these events can lead to sad consequences, as many public services can get up due to lack of fuel. Therefore, from our point of view, the fall of the British currency should not be surprising now. Unfortunately, the pair first fell by 50 points in the European trading session, and then increased by almost the same amount. The bulls tried to prevent the quotes from falling below the 35th level, but the bears were pressed with a vengeance, which led to a new powerful downward movement. But during this U-shaped movement, the price crossed the extremum level 1.3519 twice. And here it was necessary to act very carefully so as not to receive a loss. The first sell signal should be ignored, because at the moment of its formation the price had already gone down 50 points in 20 minutes. Such an abnormally strong movement should have alerted traders. When the price rushed up at the same speed and a buy signal was formed, it should also be ignored, since by that time it had already become clear that the sell signal was false, and it was only possible to enter the market by a buy signal 20 points higher the level of 1.3519. Then a new signal to sell was formed, very weak, which had been forming for more than two hours. But at least there were no abnormal movements, so it was possible to try to work it out. It would bring about 65 points in total.
Overview of the EUR/USD pair. September 30. Jerome Powell and Christine Lagarde's speeches are driving the dollar up
Overview of the GBP/USD pair. September 30. Following the "fuel crisis", the "milk crisis". The UK continues to be in a fever.
GBP/USD 1H
The GBP/USD pair continues to fall sharply on the hourly timeframe, and in two days it dropped by almost 300 points, breaking all important extremum levels and all support levels for this week. The last time the pair was at the current values was about a year ago. Nevertheless, the almost landslide fall of the British pound continues and is not going to stop. On September 30, we distinguish the following important levels: 1.3304, 1.3450, 1.3519, 1.3570, 1.3601 - 1.3607. Senkou Span B (1.3760) and Kijun-sen (1.3583) 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. On Thursday, in addition to the regular speeches of Powell and Janet Yellen, the publication of the volume of GDP in the second quarter in the UK, as well as the number of applications for unemployment benefits in the United States will take place. All four of these events can easily and most likely be ignored by the markets. Powell and Yellen have already spoken this week and have not caused any reaction from the markets. The report on GDP in Britain is not in the first estimate and the markets are already ready to see + 4.8% q/q. And reporting on claims for unemployment benefits is not important. The most important thing is that the pound is now completely at the mercy of the "fuel crisis" in Britain and all other events can be easily ignored.
We also recommend that you familiarize yourself with the forecast and trading signals for the EUR/USD pair.
COT report
Major players weakened their bullish sentiment during the last reporting week (September 14-20). Although it is now as neutral as possible. The fact is that the value of the net position for the group of "non-commercial" traders is now equal to 0 (approximately). Consequently, neither bulls nor bears have the initiative. Moreover, in the last couple of months, the mood of professional traders has been constantly changing, as the net position is either increasing or decreasing. Thus, from our point of view, the conclusion is obvious: the Commitment of Traders (COT) report does not indicate either bullish or bearish sentiment. The problem lies in the plane of the same level of 1.3600, which can be seen in the second chart even better than in the first one. The pair cannot go below this level, but it is not yet able to start an upward trend. Therefore, we need to wait for a new development of the level of 1.3600. Although this week it has already done so and another rebound followed. Therefore, an upward movement to the previous local high may begin next week. We also draw attention to the fact that the pound was unable to continue its downward movement even at a time when non-commercial traders were actively increasing their short positions. This "dip" in the net position below zero is clearly visible on the charts of both indicators in the chart. That is, the pound did not fall below 1.3600 even when it was actively sold by large players.
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.
The material has been provided by InstaForex Company - www.instaforex.com