Trading plan for the GBP/USD pair for the week of February 15-19. The new COT report (Commitments of Traders). The pound

GBP/USD - 24H.


The GBP/USD currency pair resumed its upward trend during the current week and once again updated its 2.5-year highs. In principle, the pair is already close to 3-year highs. What to do if not only the US dollar is being sold out based on "global fundamentals", but it seems that the pound is also being actively bought by traders. It is only necessary to compare the charts of the movement of the euro/dollar and the pound/dollar and it becomes clear that the British currency is not even particularly adjusted. For the last 5 months, it was just a couple of pullbacks down and that's it. In recent weeks, there have not even been any kickbacks. So the pound just keeps getting more expensive and that's it. At the same time, if in the last three years it fell based on specific factors, such as Brexit, then why it continues to grow so strongly now remains a mystery. The British economy is experiencing serious problems and it is unclear when it will begin to recover, especially positive news from the Foggy Albion does not come. "The factor of pouring huge sums into the American economy" plays a huge role, but this factor alone can not bring the pound from the level of $ 1.24 to $ 1.5. However, we also remind you that when trading any instrument, any fundamental hypotheses and assumptions must be confirmed by specific technical signals. And in terms of "technology", we now have an upward trend. So you need to continue trading on the increase.

The COT report.


During the last reporting week (February 2-8), the GBP/USD pair increased by 80 points. The pound is not rushing headlong to the north. The price increases are very moderate – 50-80 points per week, but they have been stable over the past five months. The latest COT report showed a major change in the mood of the major players. A group of "Non-commercial" traders opened new 6.5 thousand buy contracts and closed 4.6 thousand sell contracts during the reporting week. Thus, the net position of professional traders increased by 11 thousand contracts. Taking into account the fact that the total number of contracts of the "Non-commercial" group before the current changes was about 100 thousand, then 11 thousand contracts of changing the net position is a lot. And most importantly, the mood of non-profit traders has become more "bullish". Consequently, the pound may continue to rise in the long run. The indicators also show a very high probability of further growth. The green and red lines that represent the net positions of the "Non-commercial" and "Commercial" groups continue to move away from each other, which indicates the strengthening of the trend. Professional traders once again believe in the pound, although no growth factors of this currency come from the UK.

It still doesn't make much sense to talk about the fundamental background, especially for the pound/dollar pair. What difference does it make, what is the fundamental background or the macroeconomic statistics, if the pound ignores it and just continues to grow? This week, there were two speeches by the head of the Bank of England, Andrew Bailey, who never told the markets anything important and useful. In the British regulator, everything continues to revolve around negative rates. It seems that the Central Bank has abandoned the idea of introducing them in the coming months, but it has not abandoned this idea in general. Friday's statistics from Britain were important. The long-awaited GDP figure turned out to be quite positive, given the two winter "lockdowns" in the Foggy Albion. +1.0% in quarterly terms, while forecasts predicted a drop of 2%. However, it is worth making an omission here. This is only the first estimate of GDP. The final estimate, which will be published at the end of March, may differ from the current one. However, if the numbers remain positive, it will indeed be good news for the pound. We do not even take into account other macroeconomic reports of the day. European markets did not react to the GDP of Britain. Perhaps the Americans reacted to this report, as the pair's growth resumed in the afternoon when the US trading session opened.

Trading plan for the week of February 15-19:

1) The pound/dollar pair maintains an upward trend without any problems. Thus, on the 24-hour timeframe, the formal targets remain the resistance levels of 1.3943 and 1.4129. The flat, which took place a couple of weeks ago, ended without any attempts to change the trend on the part of the bears. Thus, now there is an upWARD trend again, which means that on lower timeframes, you need to give priority to uptrends and buy signals. Do not try to guess the global price reversal down. The argument "the pound has already gone up a lot" is not an argument for selling on a strong upward trend.

2) Sellers are still extremely weak, and the initiative in the market continues to be in the hands of buyers. In recent months, the bears do not even have enough strength to form a correction. Thus, on the 24-hour timeframe, there is no question of trading for a decrease. On the hourly and 4-hour timeframes, when forming a downward trend, you can consider trading down, but very carefully. In fairness, it should be noted that they are formed infrequently. If the price is still fixed below the Kijun-sen line on the 24-hour timeframe, then it will be possible to consider short positions in small lots with a target of 1.3327.

Explanation of the illustrations:

Price levels of support and resistance (resistance/support) – target levels when opening purchases or sales. You can place Take Profit levels near them.

Ichimoku indicators, Bollinger Bands, MACD.

Support and resistance areas – areas from which the price has repeatedly bounced before.

Indicator 1 on the COT charts – the net position size of each category of traders.

Indicator 2 on the COT charts – the net position size for the "Non-commercial" group.

The material has been provided by InstaForex Company -