GBP/USD 5M

The GBP/USD currency pair was also trading flat on Monday, but there is a fundamental difference between these two flats (for the euro and the pound). For the euro, the price has been in the horizontal channel for a month, and for the pound, the price only moved sideways on Monday. In general, the pound continued to rise for several consecutive weeks, which was broken last week and now a downward trend is being formed. The pair is regularly corrected very strongly within the framework of this trend, but still it cannot be denied that it has a place to be. Perhaps the most important conclusion that can be drawn on the basis of Monday is that the price failed to settle above the critical line, so the pound may continue to fall. There were no important fundamental or macroeconomic events either in the US or in the UK, so there was nothing for traders to react to. In general, we fully support the euro and the pound's succeeding decline, but the euro needs to leave the horizontal channel for this.

Trading signals for the pound on Monday also left much to be desired. All four signals were formed in the area of 1.2091-1.2106, and all four turned out to be false. Since there is no blatant flat on the pound now (on the hourly timeframe), we did not expect such a movement on Monday. It was possible to try to work out only the first two signals. Neither in the first nor in the second case did the price manage to move even 20 points in the right direction. Therefore, in both cases, traders received a loss. Unfortunately, these days also happen, nothing can be done about it. This is the foreign exchange market. The last two signals should no longer be considered, since the first two turned out to be blatantly false.

COT report:

The latest Commitment of Traders (COT) report again showed insignificant changes. During the week, the non-commercial group closed 5,300 long positions and 2,900 short positions. Thus, the net position of non-commercial traders decreased by 2,400. But what does it matter, if the mood of the big players still remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood)? To be fair, in recent months, the net position of the non-commercial group is still growing and the pound also shows some tendency to grow. However, both the growth of the net position and the pound's growth are now so weak (in global terms), so it is still difficult to conclude that this is the beginning of a new upward trend. It is rather difficult to call the current growth even a "correction". We also said that the COT reports do not take into account the demand for the dollar, which is likely to remain very high right now. Therefore, to strengthen the British currency requires that the demand for it grows faster and stronger than the demand for the dollar. And on the basis of what factors is the demand for the pound growing now?

The non-commercial group currently has a total of 86,000 short positions open and only 29,000 long positions. The net position will have to show growth for a long time to at least equalize these figures. The pound can provide theoretical support through the technical need to be corrected from time to time. There is nothing more for the British currency to count on now.

We recommend to familiarize yourself with:

Overview of the EUR/USD pair. August 9. The Fed rate... There are no other topics on the currency market right now.

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Forecast and trading signals for EUR/USD on August 9. Detailed analysis of the movement of the pair and trading transactions.

GBP/USD 1H

The pair has overcome the trend line on the hourly timeframe, so the upward trend has been canceled. As we expected after the major events in the US and the UK, the pound began a new fall, and we believe that it will continue in the coming weeks. So far, there is no trend line or channel, however, the price is below the Kijun-sen and Senkou Span B lines, so the probability of further decline is high. We highlight the following important levels for August 9: 1.1874, 1.1974, 1.2033, 1.2106, 1.2185, 1.2259. Senkou Span B (1.2091) and Kijun-sen (1.2122) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. Again, no interesting events or reports scheduled for Tuesday in the UK and the US. However, the average volatility of the pair remains quite high, so we are waiting for new trend moves.

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.