GBP/USD 15M
Both linear regression channels are directed to the upside on the 15-minute timeframe and the 1-hour timeframe, the flat ended. Therefore, a new round of upward movement has begun, and the price within its framework can calmly correct to the 1.3360 level.
GBP/USD 1H
The GBP/USD pair reached the resistance level of 1.3386 on Tuesday, December 1, which is located literally ten points from the upper line of the supposed horizontal channel of $1.33-$1.34, and a little later it broke this level and the upper channel line. If the pound was growing unreasonably earlier, now the euro has also joined it. Considering the fact that there was no correlation between the EUR/USD and GBP/USD pairs in the last week, we can conclude that the data from the US is not the reason why this is happening. But the data from the EU or the UK cannot be the reason for this either! However, we will talk about this below. From a technical point of view, the pound/dollar pair should fall for a long time. The Kijun-sen line in a flat has no meaning, like the Senkou Span B line, like all the lines of the Ichimoku indicator. The pair's quotes left the rising channel, which made it possible to expect a downward movement. However, the quotes have now come out of the horizontal channel, so expect a new round of upward movement.
COT report
The GBP/USD pair rose by 135 points in the last reporting week (November 17-23), so we can expect professional traders to become even more bullish in the Commitment of Traders (COT) report for this period. And that's what we saw. If the strengthening of the bullish mood came as a very big surprise for the euro's case, this on the other hand is not unexpected for the pound. One has only to look at two indicators that display net positions. The first indicator and its green and red lines are constantly changing the direction of their movement. This means that the net positions of non-commercial and commercial traders are constantly changing their trends. The mood becomes more bullish than bearish. The second indicator also shows that there is no trend in the most important group of non-commercial traders. Their mood also becomes more bullish and vice versa. Therefore, professional traders' desire to buy the pound increased in the reporting week, and next week it may decrease. Therefore, we cannot draw a conclusion, based on the COT report, about the pound's prospects in the coming weeks. Moreover, the foundation predicts its fall, and the technique predicts further growth.
The fundamental backdrop for the pound remains amusing enough. Brexit negotiations are still ongoing, which everyone is already tired of. Even more, market participants are tired of constant meaningless statements from both sides. Therefore, at least the markets have finally stopped reacting to the completely empty statements of London or Brussels and have stopped thoughtlessly buying the pound, counting on the signing of a trade agreement. Britain just published an index of business activity in the manufacturing sector, which rose from 55.2 to 55.6 points and had no effect on the pair's movement. The US also published the ISM Manufacturing PMI, which dropped from 59.3 to 57.5. Thus, given that the pound traded in a horizontal channel, and the euro was reaching new heights, we cannot even conclude that the US reports influenced the movement of both pairs in such a way. Major currencies no longer depend on macroeconomics.
No important reports or events from the UK on Wednesday. Traders will be able to pay attention to the ADP report on the change in the number of employed in the US private sector. However, this report is unlikely to generate a serious reaction. Thus, traders can keep track of news on the trade talks all day. What if really important information comes in today? Although the closer the deadline is (another for the pound), the more reason we can assume that the pound will collapse in any case, since its current value already includes a trade deal with the EU.
We have two trading ideas for December 2:
1) Buyers for the pound/dollar pair returned the initiative and settled above the horizontal channel. Thus, we recommend trading upward with targets at the resistance levels of 1.3458 and 1.3520. Take Profit in this case will be up to 90 points. At the same time, there is now a high probability of "swings", which persisted in the last week.
2) Sellers do not have any upperhand for the time being. We recommend selling the pound/dollar pair while aiming for the Senkou Span B line (1.3251) and the support level of 1.3252 not earlier than the price settling below the Kijun-sen line (1.3349). Take Profit in this case can range from 50 to 80 points.
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.
The material has been provided by InstaForex Company - www.instaforex.com