GBP/USD 5M
The GBP/USD pair was also not trading particularly upbeat on Monday, March 8, but at least its movement was expected and predictable. Only one important event was planned for the first trading day of the week - the speech of Bank of England Governor Andrew Bailey: this event had no effect on the pair's movement. The time of the beginning of the speech of the head of the BA is marked with the number "1" in the chart, and you can make sure that no sharp turn or increase in movement was observed at this time. The pair was trading in an absolute flat the whole day, which is currently being signaled by two linear regression channels at once. Three trading signals were formed during the past day - all for selling - all in the form of a rebound from the extremum level of 1.3857. These places are marked with rectangles in the chart. After forming such a signal, the price went down approximately 47 points each time, but then it returned back to the 1.3857 level. And so traders definitely could not get losses on Monday, and according to the available trading signals, they could earn several tens of points if Stop Loss moved down from the breakeven area every time new 15-20 points went down.
GBP/USD 1H
It is clear that the pound/dollar pair is still moving down on the hourly timeframe, however, the trend is not identifiable now. There is no trend line or channel. The bulls failed to overcome the psychological level of 1.3998 three times, so the upward movement is not yet relevant. The quotes went flat and the bulls failed to overcome the 1.3857 level three times on Monday. So now you are advised, as before, to trade from the key levels and lines plotted in the chart, with an eye to a more likely downward movement. Of the fundamental factors, it is still possible to single out only "growth in the yield of US Treasuries" and "the factor of a new stimulus package for the American economy." However, these are global factors and they had no effect on traders on Monday. No macroeconomic report set for release either in the US or in the UK on Tuesday, so the movement may be sluggish and not trendy again. Once again we would place technique in first place in terms of importance. So you can open trades for a fall when the pair rebounds from important levels and lines or after breaking them from top to bottom. You are advised to open long positions in similar situations, as shown by the arrows in the chart. As before, it is recommended to set the Stop Loss level when the price passes in the right direction by 15-20 points.
COT report
The GBP/USD pair fell by 140 points during the last reporting week (February 23-March 1). Despite the fact that the pound fell during the reporting week and continued to fall after it, the mood of the "Non-commercial" group of traders is becoming increasingly bullish. At a time when the probability of ending the upward trend, on the contrary, is growing. But we have what we have. Non-commercial traders closed 2,500 buy contracts and 8,200 sell contracts during the reporting week. Thus, the net position increased by about 6,000 contracts, and the mood of the major players became more bullish. This change is much better shown using indicators. The second indicator, reflecting just the change in the size of the net position of "non-commercial", shows the growth of this indicator over the past five weeks. At the same time, starting from mid-December, the green and red lines of the first indicator, which represent the sizes of the "commercial" and "non-commercial" net positions, move away from each other. And this is a sign of strengthening the trend. Thus, in general, the data of the COT report now speaks not of the end of the upward trend, but of its preservation and strengthening. As we mentioned earlier, any conclusions drawn from the COT reports or "foundation" require confirmation by technical signals. Therefore, take note of the conclusion drawn from the COT reports, but at the same time remember that the pair has settled below the Kijun-sen line on the 24-hour timeframe, and downward trends have formed on the lower timeframes.
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