GBP/USD 5M
The GBP/USD pair moved higher on September 3. The pound started rising after the US Nonfarm report was published, and the market ignored all the other reports. We have already talked about US reports in the article on the euro/dollar. There remains only a report on business activity in the UK services sector on Friday morning. But traders did not notice either. Thus, the pound as a whole continues to grow, which, we recall, fully meets our expectations. We believe that the pound has corrected enough in the last six months, so it is now ready to renew its three-year highs. As for the trading signals on Friday, there were none. The price only reached the extremum level of 1.3886 once - and this happened towards the end of the working day and the entire working week. The price bounced off the level of 1.3886, but it was clearly not necessary to open short positions a couple of hours before the market closed. And in any case, all the main movements of the day began after the US Nonfarm report was published, and it is not recommended to open deals during the release of important reports. Unfortunately, volatility was quite average as well. Not weak, but not strong either, although it could have been, since there were plenty of important statistics on Friday.
GBP/USD 1H
The GBP/USD pair continues its upward movement within the rising channel on the hourly timeframe. In general, the movement is very stable, so there is no reason to sell the pair at this time. As in the case of the euro, the price may correct to the critical line or to the lower border of the rising channel on Monday. We continue to draw the attention of traders to the most important levels: 1.3747, 1.3785-1.3794, 1.3886, 1.3948. Senkou Span B (1.3693) and Kijun-sen (1.3807) lines can also be sources of signals. It is recommended to set the Stop Loss level at breakeven when the price passes in the right direction by 20 points. The Ichimoku indicator lines can move during the day, which should be taken into account when looking for trading signals. The UK is slated for a single release on business activity in the construction sector on Monday, 6 September. Weak market reaction will possibly follow. There will be no more important events or reports during the day. Thus, most likely, volatility will decrease again, although it is already low now. However, traders should have gotten used to this rhythm of the pair's movement by now. The biggest danger today is a possible flat. It is likely that the markets will begin to consolidate again or simply extend the weekend for themselves. In general, at the slightest suspicion of a flat, we advise you not to enter the market and wait for the start of at least a relatively strong movement. Although, for example, there will be no important events and reports on Tuesday either. It is possible that the markets will now be in the waiting mode for the September Federal Reserve meeting.
We also recommend that you familiarize yourself with the forecast and trading signals for the EUR/USD pair.
COT report
The GBP/USD pair gained 35 points during the last reporting week (August 24-30). The most important group of non-commercial traders continues to reduce their net position, and their mood is becoming increasingly bearish. These changes are clearly visible on the indicators in the chart above. The first indicator clearly shows that the green line (net position of the "non-commercial" group) has already gone below the zero level. Simply put, the mood of the major players turned bearish at this point. You can also see that in the last six months the red and green lines (net positions of the "commercial" and "non-commercial" groups) only moved towards each other, which means the end of the current trend (in our case, an upward trend). However, in fact, we still cannot conclude that the upward trend is over, due to too weak a correction against this trend. It is the weakness of the correction over the past six months that does not allow us to conclude that this is the beginning of a new trend, and not just a correction. Thus, major players continue to sell off the pound, while the currency itself could not even go below the target area of 1.3600-1.3666 after three attempts. Therefore, we believe that in the first place in terms of importance remains the factor of infusion of hundreds of billions of dollars into the US economy by the Fed, which ensures the dollar's depreciation in the long run and does not allow it to strengthen too much in the short term. Non-commercial traders closed 2,500 buy contracts (longs) and almost 5,000 sell contracts (shorts) during the reporting week. Thus, the net position even slightly increased, but this does not change the essence of the matter. So far, the major players are bearish, but this does not help the pound/dollar pair to continue moving below 1.3600.
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