InstaForex

November 3, 2021

Forecast and trading signals for GBP/USD for November 3. Detailed analysis of the movement of the pair and trade deals. The pound was also flat throughout Tuesday

 The GBP/USD pair was traded as if at the "wake" on November 2. Despite the fact that, unlike the euro/dollar pair, the downward movement persists, we can clearly see on the 5-minute TF that it is formal. The price was between the levels of 1.3607 and 1.3667 during the European and US trading sessions (as well as Asian), which is in the 60-point horizontal channel. Consequently, even the intraday trend movement was completely absent for the pound/dollar pair yesterday. Also, there was not a single important macroeconomic event in either the UK or the US during the day. Thus, the fundamental background could not encourage traders to be more active. In general, the markets are presumably waiting for two meetings of central banks at once and, perhaps, therefore, they are in no hurry to force events and take risks. Why should they do this if it becomes absolutely clear on Thursday afternoon what changes will be made to the monetary policy of the Federal Reserve and the Bank of England? We remind you that during the publication of important reports or important events, you should not enter the market or always set Stop Loss. Therefore, there may just be few opportunities to enter the market today and tomorrow, since there will be a lot of foundation and reports. And yesterday there were practically no such reasons and opportunities, since only one trading signal was formed during the day. The price bounced off the extremum level of 1.3667, which became a sell signal, which should have been worked out by a short position. After its formation, the pair managed to go down about 30 points, but from the first time it failed to work out the support level of 1.3619. Therefore, the trade was closed by Stop Loss at breakeven, as the price returned to the level of 1.3667 before starting the second round of decline, during which it reached the level of 1.3619. No signal was generated near the level of 1.3619, since signals are formed only near extreme levels (thin red lines). A little later, the price dropped to the level of 1.3607, but this signal should not have been worked out, as it was formed too late.


On the hourly timeframe, the pound/dollar pair is trying with all its might to continue the downward movement and even a downtrend line was formed, which, however, has a very small slope and is weak. However, the downward movement of the pair itself is also weak now. Thus, there is formally a downward trend, but it is so inaccurate, and the price is already very far from the trend line, so it is unlikely that it will be possible to get any benefit from the presence of this line. We distinguish the following important levels on November 3: 1.3519, 1.3570, 1.3601 - 1.3607, 1.3667, 1.3741. Senkou Span B (1.3770) and Kijun-sen (1.3713) 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. On Wednesday, only a minor index of business activity in the services sector will be published in the UK. All the most interesting things planned in the United States - the Fed meeting, a press conference with Jerome Powell, the ADP report on changes in the number of employees in the private sector, as well as the index of business activity in the ISM services sector. Each of these events can have at least a small impact on the US dollar.


The mood of professional traders became more bullish during the last reporting week (October 19-25). The situation with the COT reports is now even more ambiguous than with the technical picture. And if we compare the COT reports for the euro and the pound, the situation becomes even stranger. Both indicators in the chart above show that the major players still do not have any clear, precise and understandable mood. Consequently, it simply does not make sense to make any forecasts based on COT reports now. The chart above clearly shows the pair's entire movement over the past six months. It is rather difficult to call it a trend or even a trend. The mood of the big players has been constantly changing in the last couple of months. The green and red lines of the first indicator (net positions of groups of traders "commercial" and "non-commercial") are constantly changing the direction of movement, constantly crossing the zero mark. This means that the two largest groups of traders are constantly increasing and decreasing their net positions. During the reporting week, professional traders opened 2.8 thousand buy contracts (longs) and closed 10.7 thousand sell contracts (shorts). Thus, their net position increased by 10,000 contracts. This is in line with what has been happening with the pound in recent weeks (it is growing). Nevertheless, it is impossible to make a long-term forecast, since the net position may fall already by the end of next week. Especially considering the fall of the pound itself on Friday.