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Forex Traiding

Forecast and trading signals for the GBP / USD pair for February 24. COT Commitment of Traders report. Analysis of Tuesday’s deals. Recommendations



DATE OF PUBLICATION: 2021-02-24 03:05:15 GBP / USD 1H. The GBP / USD currency pair on Tuesday just continued its upward movement, not paying attention to any factors. We have already repeatedly drawn the attention of traders to all the illogicality and groundlessness of such a strong strengthening of the British currency. Moreover, in the context of the last 11 months, and in the context of the last 5 months, and in the context of the last two weeks. But what if traders continue to invest dollars in the pound sterling, which leads to its absolutely wild growth? We have already said that, in general, the reasons for the fall of the American currency are clear and understandable. We analyzed them in our fundamental articles. However, the pound is not just growing. It has been growing non-stop for five months now !!! From a technical point of view, on the hourly timeframe, the pair continues to be in an upward movement, which is now being signaled by an upward channel. The bulls managed to overcome the resistance level of 1.4083 yesterday, so now the movement can continue with the target of 1.4162. At the same time, a downward correction cycle may begin at any moment. We have also already drawn the attention of traders to the fact that many signals have recently been false. In our last review, we recommended selling sterling if the price consolidates below the critical line. No such signal has been generated over the past day. We recommended to buy the pair if the level of 1.4083 was overcome, but traders somehow very unconvincingly fixed higher. On the 15 minute timeframe, you can see that the pair traded along the 1.4083 level for most of the last day. There was no clear bounce or breakout. GBP / USD 15M. On the 15 minute timeframe, both linear regression channels are still pointing up, so the short-term trend is still up. However, it cannot be otherwise, given the general trend. We did not manage to confidently overcome the 1.4083 level, so we once again draw the attention of traders to the fact that the pair generates weak or false signals too often. COT Report. During the last reporting week (February 9-15), the GBP / USD pair increased by 160 pips. If in the last weekly reviews we said that the pound sterling is becoming more expensive gradually and “is not rushing headlong to the North”, now, perhaps, we can say that it is. The latest COT reports for the pound were more or less neutral, however, the strengthening of the “bullish” sentiment on the face. This is well signaled by the first indicator in the illustration, the green and red lines of which have been moving away from each other in recent weeks. Over the last reporting week (recall that the COT report comes out with a three-day delay), a group of non-commercial traders opened 369 buy contracts and closed 3.3 thousand sell contracts. Thus, the net position of non-commercial traders increased by almost 4 thousand. Consequently, the mood of the major players has become even more bullish. In total, professional traders have 62 thousand Buy-contracts and 36 thousand Sell-contracts open. That is, the difference is approximately one and a half times and it has become such in recent weeks. For the euro, for comparison, the difference is three times and the upward movement is much weaker. Thus, even the COT reports say that such a strong and almost recoilless strengthening of the pound sterling is unreasonable. However, the uptrend persists and the trade should therefore continue to rise. UK reports on unemployment, jobless claims and changes in average wages were released today. Now we look at the charts for the pair and see that during the entire last Asian and European trading sessions the pair was moving in a sideways channel 40 points wide. Needless to say, all macroeconomic statistics were once again ignored? Although traders had the opportunity to buy the pound today and sell it. The fact is that wages rose more than predicted, and the number of applications for unemployment benefits fell by 20 thousand, and did not increase by 14, as expected. However, at the same time, unemployment also increased, though by only 0.1%. In general, the entire package of statistics can be described as neutral. On Wednesday, February 24, the Bank of England Governor Andrew Bailey is scheduled to speak in the UK, as well as several members of the regulator’s monetary committee. The United States will also host a speech by the head of the central bank, Jerome Powell. As we said in the article on the euro, we do not expect any new information from Powell, but maybe Bailey will provide such to the markets? On February 24, there are two main options for the development of events: 1) For the pound / dollar pair, the bulls continue to hold the initiative in their hands … Thus, the upward movement continues, and it is not known how long it will continue. The pair is now moving very illogically and ignores technical signals. In case of a clear price rebound from the Kijun-sen line (1.3971) or the lower line of the ascending channel, it will be possible to consider options for opening long positions with a target of the resistance level of 1.4083. Take Profit in this case can be up to 90 points. In the case of overcoming the level of 1.4083, it was also possible to open longs with the target of 1.4162, but, as we said above, this signal was weak and ambiguous. 2) Sellers continue to rest and watch the bulls. Thus, new short positions are not recommended now, although the pair may well start a new round of the downward correction. Only below the critical line (1.3971), and at the same time the ascending channel, you can try to consider shorts with a target of 1.3877 in small lots. Burning forecast and trading signals for the EUR / USD pair. Explanations to the illustrations: Price levels of support and resistance (resistance / support) – levels that are targets when opening purchases or sales. You can place Take Profit levels around them. The Kijun-sen and Senkou Span B lines are the Ichimoku indicator lines transferred to the hourly timeframe from the 4-hour timeframe. Support and resistance areas are areas from which the price has repeatedly bounced. Yellow lines are trend lines, trend lines. channels and any other technical patterns. Indicator 1 on the COT charts – the size of the net position of each category of traders. Indicator 2 on the COT charts – the size of the net position for the “Non-commercial” group. Material provided by InstaForex – www.instaforex.com Source – InstaForex

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