The GBP/USD currency pair continued its gentle upward movement on Friday and, by the end of the day, tested the resistance area of 1.3465-1.3480 for the second time. A second consecutive bounce from this area could provoke a new wave of downward movement toward the Ichimoku indicator lines. However, on Monday, the fate of the British pound will depend more on the negotiations in Islamabad.
On Friday, two quite important reports were published in the US. The Consumer Price Index, as expected, jumped to 3.3% in March, but traders anticipated exactly this figure. Therefore, the reaction was practically absent. This was also because, for the past two months, the market has generally ignored almost all macroeconomic data. The Michigan Consumer Sentiment Index was also published, and it turned out to be significantly worse than expected, at only 47.6 points. It might seem that the market reacted to this report, as the US dollar was declining for most of the day, but no! Looking at the 5-minute timeframe, it is clear that the dollar's decline stopped before the report was published. After its release, the GBP/USD pair remained stagnant until the end of the day.
From a technical perspective, the hourly timeframe maintains an upward trend, but it is currently impossible to draw a trend line—such was the sharp rise in price last week. Therefore, traders will have to rely on the Ichimoku indicator lines and technical levels.
On the 5-minute timeframe, one trading signal was generated on Friday, a bounce from the area of 1.3465-1.3480. This signal did not yield any profit for traders, but it also did not incur losses, as the price moved sideways until the end of the day. The previous buy signal was formed on Thursday when the price bounced from the area of 1.3369-1.3377. This buy position could have been carried over into Friday, providing good profits to traders.
The COT reports for the British pound show that, in recent years, commercial traders' sentiment has been constantly changing. The red and blue lines, which represent the net positions of commercial and non-commercial traders, frequently cross each other and are mostly near the zero mark. Currently, the lines are diverging, with non-commercial traders still dominant with... selling positions. However, given the events in the Middle East, it is no longer surprising that demand for riskier currencies is falling while demand for the dollar is rising.
In the long term, the dollar continues to decline due to Donald Trump's policies, as shown on the weekly timeframe (illustration above). The trade war will continue in one form or another for a long time, but geopolitical factors currently take precedence, providing strong support to the US dollar. According to the latest COT report (from April 7), the "Non-commercial" group closed 3,900 buy contracts and 300 sell contracts. Thus, the net position of non-commercial traders decreased by 3,600 contracts over the week.
On the hourly timeframe, the GBP/USD pair continues to form an upward trend, which can be reversed at any time. The market continues to closely watch events in the Middle East, which drive 90% of market movements. If there is no geopolitical news, the market prefers to wait for them in a calm trading mode. In the near future, it is essential to determine whether a final peace will be achieved in the Middle East or whether this ceasefire should be considered over.
For April 13, we highlight the following important levels: 1.3096-1.3115, 1.3179-1.3187, 1.3369-1.3377, 1.3465-1.3480, 1.3533-1.3548, 1.3615, 1.3671-1.3681, and 1.3751-1.3763. The Senkou Span B line (1.3320) and Kijun-sen line (1.3346) can also be sources of signals. It is recommended to set the Stop Loss level to breakeven when the price moves in the correct direction by 20 pips. The lines of the Ichimoku indicator may move throughout the day, which should be considered when determining trading signals.
On Monday, there are no significant events scheduled in the UK, while in the US, a report on existing home sales will be published, which is not important. Most likely, we will see movement on negotiations between Iran and the US over the weekend.
Today, traders may consider short positions targeting 1.3369-1.3377 if the price bounces again from the 1.3465-1.3480 area. Long positions can be opened if the price consolidates above the 1.3465-1.3480 area, with a target of 1.3533-1.3548.
Support and resistance price levels are thick red lines around which the movement may end. They are not sources of trading signals.
The Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator, transferred to the hourly timeframe from the 4-hour timeframe. They are strong lines.
Extreme levels are thin red lines from which the price previously rebounded. They are sources of trading signals.
Yellow lines are trend lines, trend channels, and any other technical patterns.
Indicator 1 on the COT charts shows the size of the net position of each category of traders.
