GBP/USD 1H

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The GBP/USD pair continues to move up despite an almost empty calendar of macroeconomic events. Of course, traders have paid little or no attention to macroeconomics lately. However, there must be specific reasons for the pound’s growth, which renews the same 2.5-year highs every day! Yesterday, the quotes overcame the resistance level of 1.3804 and continued to move further, to the next resistance level 1.3876, which they did not reach even a little. An upward trend line was also formed, which eloquently indicates an upward trend and also supports bulls. Thus, when the pair finally settles below this area, we can finally assume that the picture will suggest the beginning of a downward correction. In yesterday’s review, we advised you to buy the pair while aiming for the 1.3876 level, given that the price has surpassed the 1.3804 level. This signal was generated and traders could earn about 50-60 points on it. This signal has not yet been canceled, since there is a trend line and you can exit long positions when the price has settled below it. However, if traders had no desire to postpone a trade to the next day, then they could close longs even 10 points below the target level. You were advised to sell the pair when the price rebounded off the 1.3804 level, which did not happen.

GBP/USD 15M

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The picture was dull on the 15-minute timeframe: both linear regression channels are directed to the upside, which eloquently describes the short-term trend – upward. If there is a clear rebound or false breakout from the 1.3876 level, then this could lead to a very likely downward movement of at least 50-100 points. It is better to be guided by the trend line on the hourly timeframe.

COT report

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The GBP/USD pair fell by 20 points during the last reporting week (January 26-February 1). Despite the fact that price changes were nearly non-existent in recent weeks, the uptrend continues to persist and is clearly visible. The pound continues to rise despite the fact that the latest reports do not unambiguously indicate a growth in interest for the British currency among professional traders. A paradoxical situation that is difficult to explain. The latest Commitment of Traders (COT) report revealed that the non-commercial group of traders opened 5,500 buy contracts (longs) and almost 5,500 sell contracts (shorts) during the reporting week. Thus, the net position for this group of traders has not changed, and the sentiment of the major players has not changed. Basically, this conclusion coincides with the scale of price changes over the reporting week. As for long-term prospects, there is still no clear and logical conclusion. The total number of open buy contracts for professional traders is still higher than that of the sell, but the advantage is not too large (55,000 versus 44,000). The indicators, which are designed to visualize changes in the mood of large traders, continue to show the absence of a “single party line”. The mood of non-commercial traders is constantly changing, as indicated by the green line of the first indicator. The mood of commercial traders is also constantly changing, which is signaled by the red line of the first indicator. And in technical terms, it seems like the pound will collapse by 500 points tomorrow, but the fundamental background contradicts this hypothesis. An extremely confusing situation.

Bank of England Governor Andrew Bailey was scheduled to speak on Wednesday. However, judging by the nature of the pair’s movement during the day, he did not particularly say anything interesting or important. In addition to the speeches of Bailey and Powell, the US inflation report was set to be published on this day. The main indicator remained unchanged at 1.4% in annual terms, while the indicator excluding food and energy decreased from 1.6% to 1.4%. Thus, both inflation indicators turned out to be worse than forecasts and did not increase in comparison with the previous month. However, both the pound and the euro did not need any additional help. Both currencies grew, albeit rather weak.

The United States will publish a report on claims for unemployment benefits on Thursday. There is a 99% likelihood that the markets will ignore this report. No more events scheduled for tomorrow. Thus, traders will have to rely solely on technical signals when making decisions.

We have two trading ideas for February 11:

1) The price has surpassed the 1.3804 level, so the upward movement continues with 1.3876 as the target. You can open new long positions when the price surpasses the 1.3876 level, while the 1.3996 resistance level will be the target. Take Profit in this case will be up to 100 points. But given the low volatility, it may take several days for the pair to reach the target. You can also open long positions when the price rebounds from the trend line while aiming for 1.3876.

2) Sellers continue to observe what is happening from the side. Since the trend is now clear and is directed to the upside, trading bearish is not the best thing to do. However, if the price settles below the trend line, then traders can expect that the pair might slightly, and you can aim for 1.3804 and 1.3745. But this should be traded in small lots. Take Profit in this case will be up to 70 points.

Forecast and trading signals for EUR/USD

Explanations for illustrations:

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

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