GBP/USD. Forecast and trading signals for April 4. COT report. Detailed analysis of the pair’s movement and trade deals.
April 4, 2023 10:25 am
An analysis of GBP/USD (5M Chart).
On Monday, the GBP/USD currency pair likewise had a significant upward movement unsupported by anything. Some analysts may “discover” the causes for the British pound’s recent growth. For instance, it could be “a rise in market sentiment toward risk.” We are more accustomed to specific events and data. Therefore, it is impossible to attribute the 150-point increase in the British pound to temporary factors. Now, the pair is trading near the upper limit of the side channel on the 24-hour time frame, which is 1.2440. Overcoming this level will open the way for traders to reach new heights, although the current market movements are illogical. Traders are buying the pound “simply because”—inertial growth. It is more difficult to forecast the pair’s entirely nonsensical movements. Yesterday in the United Kingdom, a report on manufacturing sector business activity was released in the morning, but it was not the cause of the pound’s growth. The same holds for the ISM index in the United States.
The trade signals for the pound were exceptional, with one exception. The morning purchase signal near 1.2269 was generated with a 4-point margin of error. Four points is a significant amount. Therefore, traders could disregard it. If this were true, opening long positions would be required to overcome the crucial line. In the first scenario, it was feasible to score approximately 110 points, while in the second, just 40. In any event, the day concluded profitable since no misleading signals were generated.
The British pound began to receive COT reports that were in step with the times. The most recent report available is on March 28. According to this report, the Non-commercial group closed 0.3 thousand buy contracts and initiated 3.3 thousand sell contracts. Thus, the net position of non-commercial traders has reduced by three thousand, although it continues to increase overall. The net position indicator has steadily increased over the past 7-8 months. Still, the mood of the major players has remained “bearish,” and although the pound sterling is rising against the dollar (in the medium term), it is very difficult to answer why it does so. We cannot rule out the possibility that the pound’s decline could accelerate in the near future. Technically, it has already begun, as the pound has not risen in three months, but the movement appears to be very flat. Furthermore, note that both main currency pairs are moving similarly. Still, the net position of the euro is positive, and it even shows that the higher momentum is about to stop. On the other hand, the net position of the pound is negative, which means we can expect more growth. Yet, the pound has already risen by 2,100 points, which is a significant amount; without a significant downward correction, the continuation of the increase will be nonsensical. The non-commercial group has opened 52,000 sales contracts and 28,000 purchase contracts. We remain cautious about the long-term rise of the British pound and anticipate that it will decline.
On an hourly timeframe, the pound/dollar pair attempted to initiate a new downward trend, but to no avail. The market participants continue to purchase aggressively. There are no motives to purchase, but this does not prohibit traders from doing so. Hence, the pair may keep growing for as long as it desires. By surpassing the 1.2440 mark, the pair will exit the three-month side channel. We highlight the following critical levels on April 4: 1.1927, 1.1965, 1.2143, 1.2185, 1.2269, 1.2342, 1.2429-1.2458, 1.2589, and 1.2659. Additional signal sources include the Senkou Span B (1.2186) and Kijun-sen (1.2347) lines. These levels and lines can be “bounces” and “sums” of signals. It is advised to set the stop-loss level to breakeven when the price moves 20 points in the desired direction. The Ichimoku indicator’s lines might change during the day, which should be considered when establishing trade signals. Also, the picture shows levels of support and resistance that can be used to figure out how profitable a trade will be. On Tuesday, Andrew Bailey will perform in the United Kingdom; this is the only scheduled event. It has the same tone as Christine Lagarde’s speech.
Explanations of the illustrations:
The price levels of support and resistance (resistance/support) are depicted as thick red lines around which the price movement may end. They are not trading signal sources.
Kijun-sen and Senkou Span B are the lines of the Ichimoku indicator that have been shifted from the 4-hour to the hourly timeframe. Have robust lines.
Extreme levels are thin red lines from which prices have previously rebounded. These are trading signal generators.
Yellow lines represent trend lines, trend channels, and other technical patterns.
The first indicator on the COT charts is the net position size of each trading category.
On the COT charts, indicator 2 represents the net position size for the “non-commercial” group.
The material has been provided by InstaForex Company – www.instaforex.com
An analysis of GBP/USD (5M Chart).
On Monday, the GBP/USD currency pair likewise had a significant upward movement unsupported by anything. Some analysts may “discover” the causes for the British pound’s recent growth. For instance, it could be “a rise in market sentiment toward risk.” We are more accustomed to specific events and data. Therefore, it is impossible to attribute the 150-point increase in the British pound to temporary factors. Now, the pair is trading near the upper limit of the side channel on the 24-hour time frame, which is 1.2440. Overcoming this level will open the way for traders to reach new heights, although the current market movements are illogical. Traders are buying the pound “simply because”—inertial growth. It is more difficult to forecast the pair’s entirely nonsensical movements. Yesterday in the United Kingdom, a report on manufacturing sector business activity was released in the morning, but it was not the cause of the pound’s growth. The same holds for the ISM index in the United States.
The trade signals for the pound were exceptional, with one exception. The morning purchase signal near 1.2269 was generated with a 4-point margin of error. Four points is a significant amount. Therefore, traders could disregard it. If this were true, opening long positions would be required to overcome the crucial line. In the first scenario, it was feasible to score approximately 110 points, while in the second, just 40. In any event, the day concluded profitable since no misleading signals were generated.
The British pound began to receive COT reports that were in step with the times. The most recent report available is on March 28. According to this report, the Non-commercial group closed 0.3 thousand buy contracts and initiated 3.3 thousand sell contracts. Thus, the net position of non-commercial traders has reduced by three thousand, although it continues to increase overall. The net position indicator has steadily increased over the past 7-8 months. Still, the mood of the major players has remained “bearish,” and although the pound sterling is rising against the dollar (in the medium term), it is very difficult to answer why it does so. We cannot rule out the possibility that the pound’s decline could accelerate in the near future. Technically, it has already begun, as the pound has not risen in three months, but the movement appears to be very flat. Furthermore, note that both main currency pairs are moving similarly. Still, the net position of the euro is positive, and it even shows that the higher momentum is about to stop. On the other hand, the net position of the pound is negative, which means we can expect more growth. Yet, the pound has already risen by 2,100 points, which is a significant amount; without a significant downward correction, the continuation of the increase will be nonsensical. The non-commercial group has opened 52,000 sales contracts and 28,000 purchase contracts. We remain cautious about the long-term rise of the British pound and anticipate that it will decline.
On an hourly timeframe, the pound/dollar pair attempted to initiate a new downward trend, but to no avail. The market participants continue to purchase aggressively. There are no motives to purchase, but this does not prohibit traders from doing so. Hence, the pair may keep growing for as long as it desires. By surpassing the 1.2440 mark, the pair will exit the three-month side channel. We highlight the following critical levels on April 4: 1.1927, 1.1965, 1.2143, 1.2185, 1.2269, 1.2342, 1.2429-1.2458, 1.2589, and 1.2659. Additional signal sources include the Senkou Span B (1.2186) and Kijun-sen (1.2347) lines. These levels and lines can be “bounces” and “sums” of signals. It is advised to set the stop-loss level to breakeven when the price moves 20 points in the desired direction. The Ichimoku indicator’s lines might change during the day, which should be considered when establishing trade signals. Also, the picture shows levels of support and resistance that can be used to figure out how profitable a trade will be. On Tuesday, Andrew Bailey will perform in the United Kingdom; this is the only scheduled event. It has the same tone as Christine Lagarde’s speech.
Explanations of the illustrations:
The price levels of support and resistance (resistance/support) are depicted as thick red lines around which the price movement may end. They are not trading signal sources.
Kijun-sen and Senkou Span B are the lines of the Ichimoku indicator that have been shifted from the 4-hour to the hourly timeframe. Have robust lines.
Extreme levels are thin red lines from which prices have previously rebounded. These are trading signal generators.
Yellow lines represent trend lines, trend channels, and other technical patterns.
The first indicator on the COT charts is the net position size of each trading category.
On the COT charts, indicator 2 represents the net position size for the “non-commercial” group.
The material has been provided by InstaForex Company – www.instaforex.com
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