GBP/USD. March 2. GBP loses ground again
March 2, 2023 12:22 pmVideo
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Yesterday, there was one interesting economic event for the pound-dollar pair. The ISM manufacturing activity index was released. Indexes of business activity do not often make traders act in the market, and yesterday, it was just such an exception. Business activity rose to 47.7 from 47.4 points. Meanwhile, traders expected a stronger increase. Nevertheless, the US dollar rallied for the rest of the day. This week, traders will be interested only in the second index of ISM for the services sector. It will be released on Friday and may be much stronger than the manufacturing index. The USD may rise for the rest of this week but the sideways movement in the last weeks might lead to a new increase in the pair.
If the pair continues to move flat, traders are likely to ignore the information background. Even if there is very strong US data, bears still do not want to break through the level of 1.1920, the last two lows. Even Andrew Bailey or Jerome Powell’s speeches will not affect traders’ sentiments. Thus, we should first wait for the end of the flat and remember that almost any movement is possible inside the range of 1.1920-1.2142.
On the 4-hour chart, the pair reversed to the downside. Recently, reversals have become very frequent in the market. Traders practically do not notice the level of 1.2008. There are no new emerging divergences. There is no trend range or trend line. The situation is quite confusing and it would be better to pay more attention to the hourly chart, but everything is not so clear there.
COT report:
Last reporting week, the sentiment of non-commercial traders became less bearish. The number of long contracts owned by speculators decreased by 6,713, and the number of short ones dropped by 7,476. The general sentiment of big players remains bearish, and the number of short contracts still exceeds the number of long ones. For the last several months, the situation was changing in favor of the British pound. Now the difference between the number of long and short contracts has almost doubled again. Thus, the prospects of the pound sterling worsened again, but it does not fall, following the euro. On the 4-hour chart, the pair broke the three-month ascending channel, and this moment can prevent GBP from continuing to grow.
US and UK economic calendars:
US – Unemployment Claims (13-30 UTC).
On Thursday, in the UK and the US, the economic calendars contain only one yet important event. The influence of the information background on traders’ sentiment may be absent or very weak today.
GBP/USD forecast and recommendations for traders:
It would be better to open new short positions on the GBP/USD pair if the price closes below the level of 1.1920 on the hourly chart with the targets of 1.1883 and 1.1737. Long positions may be opened on a rebound from the level of 1.1920 with the target of 1.2112.
The material has been provided by InstaForex Company – www.instaforex.com
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