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Forecast and trading signals for the GBP / USD pair for January 20. COT Commitment of Traders report. Analysis of Tuesday’s deals. Recommendations

DATE OF PUBLICATION: 2021-01-20 03:04:17 GBP / USD 1H. If the EUR / USD currency pair has more or less corrected in recent weeks and is now aiming for a new uptrend, then there was really no correction for the GBP / USD pair … Do not forget that the volatility for the pound has always been higher, so 100 points of movement for the euro and 100 points of movement for the pound are not the same thing. Overall, the pound continues to trade very close to 2.5-year highs. And it is precisely this fact that makes us assume the resumption of the uptrend. Three bounces from the 1.3700 level should not mislead traders. In practice, double top or triple top patterns very rarely lead to a global reversal. Level breakouts are much more common. We believe that this time the level of 1.3700 will also be overcome. Although we still believe that the pound’s rise in recent months is absolutely and completely unfounded. And at this time, there is also no reason for a new strengthening of the British currency. But what can you do if the demand for the dollar remains “below the baseboard?” GBP / USD 15M. On the 15-minute timeframe, both linear regression channels turned up, but the quotes “died” near the Kijun-sen line and within the 1.3606 – 1 range. 3626. Once again, we draw the attention of traders to the fact that up to the maximums in 2.5 years, less than 100 points. Thus, a confident overcoming of the 1.3606 – 1.3626 area will significantly increase the likelihood of a new round of the upward movement of the pound / dollar pair. COT Report. The latest COT report, which was released this time strictly on schedule, finally showed the long-awaited strong changes in mood traders. Professional market participants have opened more than 10 thousand purchase contracts this time and only 3 thousand sales contracts. Thus, the mood of the “Non-commercial” group, which, we recall, is considered the most important group of traders, has become much more bullish. This, in turn, means that the upward movement in the pound / dollar pair may continue. And this conclusion completely coincides with the technical picture that is observed at this time. Thus, as we have warned more than once, any fundamental hypothesis must have specific technical confirmation. If they are not there, then no matter what the “foundation” is, the pair can continue to move completely not responding to it. It is not the “foundation” that drives the markets; the markets move themselves, but the “technique” visualizes the behavior of traders. Therefore, in such a situation as now, it is “technology” that has a priority. In Great Britain during the past day there was not a single more or less important event. However, this is clearly seen from the low volatility of the pair on January 19. There was absolutely nothing to pay attention to traders that day, which, in principle, was for the better. The “foundation”, which now still has no meaning for market participants, was not misleading. During the past day, not even a single signal was formed. For purchases, it was necessary to wait for the overcoming of the 1.3606 – 1.3626 area. For sales – the price rebound from the Senkou Span B. Neither the first nor the second has happened. On Wednesday, several more or less significant macroeconomic reports will finally be published in the UK. However, this definition only applies to the consumer price index, which is expected to be 0.5% – 0.6% in annual terms. It is difficult to say how traders might react to this value. On the one hand, any rise in inflation in the current environment is a positive factor. On the other hand, inflation still remains very weak, and markets do not need positive factors to buy the pound. Later in the evening, there will be another speech by the Governor of the Bank of England, Andrew Bailey, but it seems to us that he has already said everything he could in his first speech in 2021. Traders still paid attention only to the positive in his speech, and ignored all the negative. As of January 20, there are two main scenarios for the development of events: 1) The “swing” continues for the pound / dollar pair, so now it is still difficult to conclude that whose hands are the initiative. If the price returns above the resistance area 1.3606 – 1.3626, it is recommended to buy the pound sterling again with the target of 1.3700 (the previous local high). Take Profit in this case will be up to 70 points. Further purchases will be possible only if the level of 1.3700 is confidently overcome. 2) Sellers could not keep the pair below the Senkou Span B line (1.3576), therefore, short positions are no longer relevant at the moment. It is recommended to consider sell orders again when the price fixes again below the Senkou Span B line with the target of the support level of 1.3452, but in general the pound / dollar pair continues to move without any logic. Take Profit in this case will be up to 100 points. 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 – Source – InstaForex

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