The legend in the InstaSpot team!
Legend! You think that's bombastic rhetoric? But how should we call a man, who became the first Asian to win the junior world chess championship at 18 and who became the first Indian Grandmaster at 19? That was the start of a hard path to the World Champion title for Viswanathan Anand, the man who became a part of history of chess forever. Now one more legend in the InstaSpot team!
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The GBP/USD pair continued to trend downward throughout Thursday. Just the day before, we mentioned that the market's reaction to the FOMC meeting might last up to 24 hours. It is not uncommon for the price to move in one direction initially and then return to its starting position. This time was different. Despite the Federal Reserve merely signaling its intention to start raising rates (at least not before September), the market spent the entire day buying the dollar. We do not view such a reaction as logical or justified. On Thursday morning, a strong UK unemployment report was released, yet it went unnoticed. The Bank of England's meeting concluded with slightly more "hawkish" results (the number of officials voting for a rate hike was higher than expected), but experts report that inflation in Britain will likely rise, forcing the BoE to follow in the footsteps of the European Central Bank rather than the Fed. However, all positive factors for the British pound were ignored by the market.
From a technical standpoint, the downward trend has resumed as the market has aggressively bought the dollar for an entire day. We do not consider such movement logical or justified. Instead, we view it as a potential trap for traders. There were no grounds for such a strong rise in the U.S. currency. The conclusion of the geopolitical conflict in the Middle East, the BoE's neutral stance, and the strong inflation report from Britain—all these factors should have at least halted the decline. However, they were ignored.
On the 5-minute timeframe on Thursday, no trading signals were formed. Thus, despite the strong movement throughout the day, there were no grounds for entering the market. Perhaps this is for the best, as the pair's decline was unjustified.
COT reports for the British pound show that in recent years, commercial traders' sentiment has been continually shifting. The red and blue lines representing the net positions of commercial and non-commercial traders frequently cross each other and are often close to the zero mark. Currently, the lines are moving apart, with non-commercial traders continuing to dominate with... sales. Given the events in the Middle East, it is not surprising that demand for risk-sensitive currencies is low.
In the long term, the dollar continues to decline due to Donald Trump's policies, which is clearly visible on the weekly timeframe (as shown in the illustration above). The trade war will continue in one form or another for a long time, and Trump's policies are aimed both directly and indirectly at weakening the American currency. However, currently, geopolitical factors are providing strong support for the dollar. Since the conflict in the Middle East is not yet resolved, the U.S. dollar may still show growth potential. According to the latest COT report (dated June 9), the "Non-commercial" group closed 7,900 BUY contracts and opened 4,000 SELL contracts. Consequently, the net position of non-commercial traders decreased by 11,900 contracts over the week.
On the hourly timeframe, the GBP/USD pair has resumed its downward trend, which does not align with the current fundamental and macroeconomic backdrop. However, the market has ignored both the fundamentals and macroeconomics for three months, and now it is ignoring geopolitics and selectively responding to other factors. We do not consider the dollar's increase on Thursday to be justified. The movement is illogical.
For June 19, we highlight the following important levels for trading: 1.3096-1.3115, 1.3179-1.3187, 1.3301-1.3309, 1.3369-1.3377, 1.3465-1.3480, 1.3588, 1.3671-1.3681, 1.3751-1.3763. The Senkou Span B line (1.3393) and the Kijun-sen line (1.3330) may also serve as potential sources of signals. It is recommended to set the Stop Loss order to breakeven if the price moves in the correct direction by 20 pips. The lines of the Ichimoku indicator may shift throughout the day, which should be considered when determining trading signals.
On Friday, a retail sales report is scheduled for release in the UK, but since the market has already processed this week's inflation and unemployment reports, it is unlikely to react to the retail sales data. In the U.S., the economic calendar is empty. Ideally, the market should take a pause today and potentially retrace a bit upwards.
Today, traders may consider opening short positions targeting 1.3096-1.3115 if the pair settles below the 1.3179-1.3187 area. Long positions will become relevant in the event of a bounce from the 1.3179-1.3187 area, targeting 1.3301-1.3309.
*এখানে পোস্ট করা মার্কেট বিশ্লেষণ আপনার সচেতনতা বৃদ্ধির জন্য প্রদান করা হয়, ট্রেড করার নির্দেশনা প্রদানের জন্য প্রদান করা হয় না।
ইন্সটাফরেক্স বিশ্লেষণমূলক পর্যালোচনাগুলো আপনাকে মার্কেট প্রবণতা সম্পর্কে পুরোপুরি সচেতন করবে! ইন্সটাফরেক্সের একজন গ্রাহক হওয়ায়, দক্ষ ট্রেডিং এর জন্য আপনাকে অনেক সেবা বিনামূল্যে প্রদান করা হয়।
