September 21, 2021

Forecast and trading signals for GBP/USD for September 21. Detailed analysis of the movement of the pair and trade deals. Pound was caught in a storm ahead of two central bank meetings

 The GBP/USD pair showed quite good volatility on September 20, but the nature of the movement was again far from ideal. Last Friday was about the same picture. Quotes moved just fine in the Asian trading session and at the beginning of the European one - down all the time. Even a very good sell signal was formed. However, all these movements and signals happened at night when most of the traders were out of the market. But with the advent of daytime, movements began, which can not be called anything else than a "storm". The price began to "dance" around the extremum level of 1.3677, forming trading signals in batches. Naturally, most of them turned out to be false. No important macroeconomic report during the day, as well as any other fundamental event. Let's now look at all the trading signals and figure out how to trade on Monday. The first trading signal was formed in the middle of the European trading session. The pair exceeded the level of 1.3677, so we got a sell signal. However, the price could not continue its downward movement, so a few hours later the price settled above the level of 1.3677, which was the cancellation of the sell signal and the formation of a buy signal. Thus, on the first trade, a loss of about 15 points was received. Unfortunately, the signal to buy also turned out to be false, since the upward movement of the pair was also unable to continue. Literally an hour later, the quotes settled below the level of 1.3677, which became a signal to cancel and a buy signal. The loss on the second trade was also 15 points. All subsequent signals should not have been worked out, since by that time several signals had already formed around the level of 1.3677 and all of them turned out to be false.

The GBP/USD pair continues to move down as a whole on the hourly timeframe, but it was not the most pleasant one. However, traders now have a downward trend line at their disposal, so it is advisable to look for opportunities to trade down. Recall that we are still counting on the resumption of the global upward trend, and the price is now located near the area where an upward reversal is possible. This area is 1.3600-1.3666. However, a lot will now depend on the reaction of the markets to the meetings of the Federal Reserve and the Bank of England. We also continue to draw the attention of traders to the most important levels: 1.3601, 1.3677, 1.3732, 1.3785 - 1.3794. Senkou Span B (1.3818) and Kijun-sen (1.3777) 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. No major publications or major events scheduled in the UK and the United States on Tuesday, September 21. However, the pound/dollar pair was trading quite actively on Monday, therefore, a very vigorous movement can be observed on Tuesday. Markets continue to wait for the results of the Fed and BoE meeting.

The GBP/USD pair did not gain or lose a single point during the last reporting week (September 7-13). Recall that in recent weeks, according to Commitment of Traders (COT) reports, the mood of the major players has changed to bearish. The green line of the first indicator in the chart above (denotes a change in the net position of the "non-commercial" group) has dropped below zero. This was until the last COT report, which came out on Friday, September 17th. At that time, we already questioned the continuation of the British currency's decline. Simply because the pound, like the euro, has been correcting for more than six months against the global upward trend. And during this time, it managed to correct by 23.6%. This is very small and certainly does not look like a new downward trend is forming. And the latest COT report did show that any expectations of further dollar growth may be premature. Despite the fact that at the end of the week the dollar rose against both the pound and the euro, during the reporting week, major players immediately opened 15,000 buy contracts (longs) and closed the same number of sell contracts (shorts). That is, the net position for the "non-commercial" group of traders has grown by 30,000 at once. Considering that until the last COT report, only 30,000 buy contracts (longs) were opened for commercial traders, such changes are global. Thus, in the case of the pound, the chances of a further fall are much less than with the euro. Moreover, both the pound and the euro have corrected against the upward trend by 600 points. But it is less than 23% for the pound, and it is about a third for the euro.