The GBP/USD pair during Tuesday was trading much more volatile and more beautiful than the EUR / USD pair, but at the same time it managed not to form a single normal signal. During the day, no major reports were released in the UK and US either, so there was nothing for traders to react to. In general, the upward trend continues, but at the same time the pair has managed to "climb" into the horizontal channel, which will be more clearly visible on the hourly timeframe. The first buy signal was generated on the 5-minute timeframe at the very beginning of the European trading session. The quotes have overcome the extremum level 1.4181 and it is good that they managed to go up after that 20 points, which made it possible to set Stop Loss to breakeven. After that, the quotes returned to the level of 1.4181 and traded strictly "according to it" for about two hours. It was quite a difficult moment for traders. You shouldn't have opened a sell deal, because the Kijun-sen line lies just below the level of 1.4181, from which there could be a rebound. A buy deal should not have been opened either, since earlier two false signals had already been formed near the level 1.4181, which is no longer relevant since yesterday and has been removed from the charts. In the end, the pound / dollar pair nevertheless formed a signal that could be worked out. The price broke the critical line, which lay at 1.4167, which allowed traders to open short positions. At the time of the formation of the signal to sell, the pair had already gone down from the high of the day 60 points, so it would be naive to believe that it will go 70 more with an empty calendar of macroeconomic events. As a result, by the middle of the American trading session, the sell deal should have been closed manually, as usually in the evening and at night the pair either begins to correct or goes flat. We do not recommend rescheduling trades to the next day, and our trade was not closed either by Stop Loss or Take Profit. Therefore, it was necessary to close it manually, the profit is about 30 points.
The British pound fell into the horizontal channel at 1.4100-1.4220 on the hourly timeframe, which is not very similar to the horizontal channel. But it was in this range that the pair spent the last days. Yesterday the quotes even managed to overcome the uptrend line, but in the current situation this does not mean at all that the uptrend is over. Below the Senkou Span B line, the bears have not yet managed to gain a foothold. All downward movement from the local maximum is only 120 points. Moreover, a possible lateral channel. In general, so far we cannot conclude that the upward movement is over. We continue to draw the attention of traders to the most important levels, of which there are very few now, and the lines and to trade from them: 1.4080 and 1.4240. Senkou Span B (1.4112) and Kijun-sen (1.4167) lines can also be signal sources. 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. The Bank of England's representative is scheduled to speak again in the UK on Wednesday, this time Jonathan Haskell, but this speech is also very unlikely to be worked out by the markets. In the States, there won't be any important information at all during the day.
We also recommend that you familiarize yourself with the forecast and trading signals for the EUR/USD pair.
The GBP/USD pair fell by 10 points during the last reporting week (May 11-17). In general, the pound continues to rise in price, which can clearly be seen in the chart above. Major players have resumed building up long positions since about December 2020. But at the same time, even according to Commitment of Traders (COT) reports, third-party global factors are clearly visible, which also support the pound. See for yourself. Until last December, when the upward trend in the pound continued, commercial and non-commercial traders did not really even know what to do with the pound. At that time, we recall, it was completely unclear how Brexit would end up and whether there would be a trade deal, and what awaits the UK in general. The red and green lines of the first indicator constantly crossed, which indicates the absence of a trend. But the pound was still growing. Therefore, even from this point of view, there is a serious imbalance in the money supply of Britain and the United States. Otherwise, the picture is as follows: neither the big players, nor the small ones bought the pound, but it grew anyway. It doesn't work that way. If market participants did not buy the pound, then it could grow only due to non-market factors, in particular, the intervention of the Federal Reserve and the Bank of England. Now the COT reports show that professional traders have started to buy the pound again, but they are not doing it very zealously. Rather, they try to simply follow the trend that is being formed without their much involvement. For example, a group of non-commercial traders closed 3,800 Buy contracts (longs) and 1,500 Sell contracts (shorts) during the reporting week. Thus, the net position for this group has decreased, which means that the bullish sentiment is weakening. It is this indication, not that the bearish mood has strengthened. The bears continue to rest now.
