The GBP/USD pair moved extremely weakly again on September 8. From the low to the high of the day, the pair passed only 64 points. Needless to say, this is very little for the pound/dollar pair? The movements look quite serious on the 5-minute TF, but this is all due to the scale of the chart. Recall that normal volatility for this pair is considered to be 100-130 points per day. That is exactly what it was six months ago. The very nature of the movements on Wednesday left much to be desired. The pair was constantly jumping from side to side, which was fraught with the formation of false signals and losses. However, it is for the best that not a single trading signal was generated during the European trading session. But two signals were generated at the US trading session, and the first should have been filtered, since about the same time, Bank of England Governor Andrew Bailey and his colleagues spoke at the Treasury. And the relatively strong movements of the pair at this time are probably connected with this event. First, the price crossed the extremum level of 1.3747 from top to bottom, and then from bottom to top. The second buy signal could be worked out, since by that time it had already become clear that the pair had turned upward and would continue to move in this direction. However, the signal was formed in the late afternoon, so it did not allow traders to make much money. A long position should have been manually closed at a profit of about 15 points.
Overview of the EUR/USD pair. September 9. US inflation is the last frontier before the Fed meeting.
Overview of the GBP/USD pair. September 9. Scotland will make every effort to hold the referendum by the end of 2023.
The GBP/USD pair broke through the rising channel on the hourly timeframe, and in the near future it may settle below the Ichimoku cloud. We still expect the upward trend to resume, so we regard the current downward movement as a correction. Bailey's speech from yesterday supported the British pound, so the upward trend can resume. We continue to draw the attention of traders to the most important levels: 1.3677, 1.3732, 1.3785 - 1.3794, 1.3886. Senkou Span B (1.3784) and Kijun-sen (1.3810) lines can also be signal sources. 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. On Thursday, September 9, the US is scheduled to publish a single report on claims for unemployment benefits, which has little chance of being reflected in the graph. Also on this day, speakers from the Federal Reserve Mary Daly, Michelle Bowman and John Williams will deliver speeches. There is a certain probability that they will report something important, but it is not high. There are no major events scheduled in the UK today. Thus, volatility is unlikely to rise.
We also recommend that you familiarize yourself with the forecast and trading signals for the EUR/USD pair.
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