GBP/USD 5M
The GBP/USD pair was initially systematically and unhurriedly declining, and then it was rising in the same manner. Volatility has significantly dropped compared to the previous days and reached 78 points. It seems to be a lot, but this value is "below average" for the pound/dollar pair. No significant event or important macroeconomic publication in the UK and the United States during the day. Thus, there was simply nothing for traders to react to yesterday. And this is probably even good, since the markets finally calmed down after summing up the results of the Federal Reserve meeting last week and an upward correction began. We believe that the pair is quite capable of returning to its original positions within the framework of this correction, from where the fall began a week ago or a little more. We still believe that the US dollar does not have deep fundamental or technical support, however, as part of a downward correction against the global upward trend, the pair may still drop to the 37th level in the next month. Only three signals were formed on the 5-minute timeframe Tuesday, and everything was around the 1.3886 level. At first, the price surpassed it, forming a sell signal, but this signal turned out to be false and the trade was closed at a loss of about 18 points. The next signal in the form of a breakthrough of the 1.3886 level was also false, but traders had to reach it with long positions. After it was formed, the price failed to rise by 20 points, and this was necessary to set Stop Loss at breakeven. Afterwards the price returned to the level of 1.3886, but this time it bounced off it, so traders had to keep long positions open. After this rebound, the price finally went in the direction that traders needed and by the end of the working day, the trade was in profit by around 40 points. Here it was necessary to close it manually, since there were still 20 points to go to the Kijun-sen line, and it was already in the evening. As a reminder, we do not recommend trading in the evenings or at night, or postponing trades to the next day. Thus, in total, traders could have earned about 20 points of profit yesterday.
Overview of the EUR/USD pair. June 24. The euro has stopped falling, but is in no hurry to recover. There was little hope for Christine Lagarde's speech.
GBP/USD 1H
An upward correction is clearly visible on the hourly timeframe for the pound/dollar pair and in the near future the price may reach the Kijun-sen line. A rebound from this line can provoke a new round of a downward movement, but since we consider the last drop in the pair's quotes to be excessively strong and inconsistent with the strength and significance of the fundamental background, we are inclined to believe that the critical line will still be overcome, and the upward movement - will continue. In technical terms, we continue to draw your attention to the most important levels and recommend trading from them (note that some of them have been moved, some have been removed): 1.3800, 1.3886, 1.3975, 1.4008 and 1 , 4080. Senkou Span B (1.4086) and Kijun-sen (1.3958) 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. Indexes of business activity in the service and manufacturing sectors will be published in the UK and the US on Wednesday. However, we do not believe there will be a strong reaction to these reports. They, of course, should not be overlooked, but the markets are unlikely to pay attention to them, unless the actual values differ greatly from the forecasted ones.
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 70 points during the last reporting week (June 8-14). However, the new Commitment of Traders (COT) report was not released on Friday, so no special conclusions can be drawn on the current mood of the major players. It is necessary to wait for the new report, but it won't provide a complete picture of the state of affairs, since the last three trading days will not be included in it. But it was during these three days that the pound lost around 300 points, so it can be assumed that professional traders closed long positions and opened short ones. Consequently, the mood of traders could change and become less bullish. However, all of this will become known when the new COT report is published. So far we can say that in recent weeks nothing has changed much with the mood of the "non-commercial" group, which is the most important of all. This is not surprising, since the pair stood practically in one place for the entire month. We believe that global fundamentals will continue to have a negative impact on the US dollar, but this does not mean that the pound cannot fall in the short and medium term. As for the indicators, they also did not show any changes in recent weeks. In the first indicator, the green and red lines (net positions of groups of traders "non-commercial" and "commercial") continue to move sideways, and in the second indicator, the histogram has been at approximately the same level in recent weeks, which signals the absence of any or changes in the mood of professional 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