hourly chart

In my morning forecast, I highlighted the level of 1.0800 and recommended making entry decisions based on it. Let's look at the 5-minute chart and analyze what happened there. The rise and formation of a false breakout at 1.0800 provided a sell signal for the euro, but there was no significant downward movement. The technical picture remained largely unchanged in the second half of the day.       Everyone awaits the US inflation figures, which will determine the market and the Federal Reserve's actions. If prices drop more than economists' expectations, the euro will have a chance to continue rising against the US dollar, as the central bank is likely to take the first pause in the interest rate hike cycle since 2021. If inflation remains high, we can expect renewed pressure on EUR/USD and a decline in the pair. In that case, I will act on the decline and the false breakout around the support level of 1.0767, formed based on yesterday's close and where the moving averages, favoring buyers, are located.   This will provide an opportunity to enter long positions with the target of another rise towards the level of 1.0800. A breakthrough and top-down test of this range are necessary for buyers, as it will strengthen the demand for the euro, creating an additional entry point for increasing long positions with an update to the next level of 1.0830. The ultimate target remains around 1.0870, where I will take profits. In the case of a decline in EUR/USD and the absence of buyers at 1.0767, the pressure on the euro will return. Therefore, only the formation of a false breakout around the next support level of 1.0734, the weekly low, will provide a signal to buy the euro.   I will open long positions after a rebound from 1.0705, with a 30-35 point upward correction target within the day. To open short positions on EUR/USD, the following is required: Bears managed to defend the market around the resistance level of 1.0800, but there was no significant downward movement. The US inflation data will determine everything. However, considering the bullish market with selling pressure in the second half of the day, it is better to take your time.   I will act only after another unsuccessful consolidation above the resistance level of 1.0800. A false breakout at this level will provide a sell signal capable of pushing the pair back to 1.0767, where the moving averages favoring bulls are located. Consolidation below this range and a reverse test from below to above will lead straight to 1.0734. The ultimate target will be around 1.0705, where I will take profits.       If EUR/USD moves upward during the American session and there are no bears at 1.0800, which is likely to be the case, the demand for the euro will only strengthen, potentially leading to a more powerful upward surge in the pair. In that case, I will postpone short positions until the new resistance level of 1.0830.   Selling can be done there, but only after an unsuccessful consolidation. I will open short positions immediately on a rebound from the maximum of 1.0870, with a 30-35 point downward correction target.   The Commitment of Traders (COT) report for June 6 showed a decrease in long positions and a slight increase in short positions. Despite this, the Federal Reserve's decision on interest rates this week can significantly change the market dynamics, so paying much attention to the abovementioned changes may be optional. If the Fed decides to pause the rate hike cycle, the euro will gain significant weight, and the US dollar will weaken.   Along with the European Central Bank's aggressive policy, despite the first signs of a slowdown in underlying inflationary pressure, all of this will lead to a continued rise in risk assets against the US dollar. According to the COT report, non-commercial long positions decreased by 5,757 to 236,060, while non-commercial short positions increased by 1,457 to 77,060. The overall non-commercial net position decreased to 158,224 from 163,054 by the end of the week. The weekly closing price decreased to 1.0702 from 1.0732.   Indicator signals: Moving averages. Trading occurs above the 30-day and 50-day moving averages, indicating a likelihood of the euro's rise. Note: The author considers the period and prices of the moving averages on the hourly chart (H1), which differs from the general definition of classical daily moving averages on the daily chart (D1).  

Yesterday, on the hourly chart, the GBP/USD pair experienced a rebound from the corrective level of 127.2% (1.2777), then dropped nearly to 1.2676 and returned to the 1.2777 level. Another rebound from this level will favor the American currency, leading to a decline toward the Fibonacci level of 100.0% (1.2676). If the pair's rate closes above 1.2777, it increases the likelihood of further growth towards the next corrective level of 161.8% (1.2905).   Trading volumes have been sufficiently high recently, and trader sentiment remains bullish. In a few hours today, the Bank of England will announce its decision on the interest rate.   According to forecasts, the rate will increase by 0.25% again, with 7 out of 9 MPC committee members voting in favor of the hike. This decision has already been factored into current prices, but bullish traders are currently very strong and can accommodate the same rate hike twice.   There is no scheduled speech by Andrew Bailey in the economic events calendar; we must rely on meeting minutes and accompanying letters. Despite yesterday's weak inflation report, the market does not expect a 0.50% rate increase today. As a result, Powell's second speech may have an even greater impact on the pair's movement, but the issue is that these two events almost coincide. When the Fed President's speech begins, it will be difficult to determine whether or not the market pays attention to it.     Therefore, we should anticipate active trading today, but it doesn't necessarily mean the pair will move in one direction. It could be a situation similar to yesterday. On the 4-hour chart, the pair has reversed in favor of the British pound and resumed upward toward the 1.2860 level after two bullish divergences were formed in the RSI and CCI indicators. There are no new emerging divergences observed in any indicators today. If the pair's rate rebounds from the 1.2860 level, it would indicate a reversal in favor of the US dollar, resulting in a decline toward the Fibonacci level of 100.0% (1.2674).  

On the hourly chart, the GBP/USD pair on Tuesday secured above the next corrective level of 127.2% (1.2917). Thus, the growth process can continue toward the next corrective level of 161.8% (1.3007). A level of 1.3000 can be considered a psychological mark, and such levels usually attract price. In other words, traders may subconsciously strive for such marks. The pair's consolidation below the level of 1.2917 will work in favor of the US dollar, and some fall toward the level of 1.2847. The waves are now painting us the same picture as with the euro.   Each peak of the next wave is higher than the previous one, and each low - is higher than the previous one. Thus, there are no prerequisites for a change in traders' sentiment to "bearish." However, the most important report of this week will be released today, so the market reaction can be strong and unexpected. The pound rose in the first two days of the week, although the grounds for purchases were quite dubious. For example, yesterday's unemployment reports in the UK showed a deterioration, and the pound could show a decline.   But traders have already focused on US inflation, which could drop to 3.1% in June. This value has already been factored in, but what if the report shows a different result? In this case, we are waiting for a move that will depend on the side of the deviation from the forecast. If the consumer price index turns out to be above 3.1%, then a decline in the pair can be expected. If below - new growth. The level of 1.3000 can be worked out a bit later, not today. Today the probability of a decline is higher. However, this does not mean traders' sentiment will change to "bearish."   On the 4-hour chart, the pair has rebounded from the level of 1.2745 and consolidated above the level of 1.2860. Thus, the growth of quotes can continue towards the next level of 1.3044. A "bearish" divergence is brewing at the CCI indicator, which may indicate the beginning of forming a "bearish" wave on the hourly chart. There are no sell signals now, and the pound ignores the news background, which should have led to its decline.   Commitments of Traders (COT) Report: During the previous reporting week, there was a shift in the "Non-commercial" traders' sentiment, which turned somewhat less "bullish." The count of long contracts held by speculators fell by 7,921 units, while the short contracts saw a decrease of 6,192. Despite this, the predominant sentiment among the major players remains distinctly "bullish," with a marked difference between long and short contracts: 96 thousand to 46 thousand. The pound has a favorable outlook for further growth, particularly as the current news environment lends it more support than the dollar. Nevertheless, anticipating a strong surge in the value of the pound sterling is increasingly challenging. The market is overlooking several factors that favor the dollar, and expectations of continual interest rate increases from the Bank of England primarily drive the pound's growth.     Here's the upcoming news schedule for the US and UK: US - Consumer Price Index (CPI) (12:30 UTC). US - "Beige Book" (18:00 UTC).   For Wednesday, the economic event calendar includes one report and one event. The "Beige Book," an aggregation of economic reports from various US regions, doesn't generally significantly influence the market. However, the inflation report may substantially sway traders' sentiments. As for the GBP/USD forecast and trading advice: Minimal selling of the pound during the "bullish" trend is possible. For instance, a rebound from the 1.3007 mark on the hourly chart with a target of 1.2917 or a closure below the 1.2917 level aiming for 1.2847 could be considered. New purchases could be advisable upon a rebound from the 1.2917 level on the hourly chart, aiming for 1.3007. However, movements in the latter half of the day may be considerable and vary in direction.  

Analysis of GBP/USD 5M   On Friday, the pound sterling corrected higher after the release of US data. There were three reports, two of which were simply ignored by the market. The decline in the unemployment rate did not save the US dollar from falling, as the market only considered the NonFarm Payrolls, which came in lower than forecast, and the value of the previous month got revised lower.   Therefore, there were grounds for the dollar to fall on Friday. In the UK, there were no important reports or events. The US dollar fell by approximately 105 pips from the daily lows, but if we look at the opening and closing prices of the day, its losses were only 40 pips, and at that moment, they were almost negated. We believe that the pound has no grounds to resume the uptrend.   The trading signals for the pound were almost identical to those for the euro. Traders could use the bounce from the level of 1.2693 to open long positions. Subsequently, the pair broke through the area of 1.2746-1.2762, and it remained above it until the end of the trading session. As a result, the long position could be closed anywhere above the mentioned area, and the profit amounted to at least 70 pips.   COT report: According to the latest report, the non-commercial group of traders closed 13,300 long positions and 3,800 short ones. Thus, the net position of non-commercial traders fell by almost 10,000 positions in a week. But in general, it is still rising. The net position has been steadily growing over the past 10 months as well as the pound sterling. Now, the net position has advanced markedly. This is why the pair will hardly maintain its bullish momentum. I believe that a long and protracted downward movement should begin. COT reports signal a slight growth of the British currency but it will not be able to rise in the long term.   There are no drivers for opening new long positions and not many technical signals for short positions either. The British currency has already grown by a total of 2,800 pips, from its absolute lows reached last year, which is a significant increase. Without a downward correction, the continuation of the uptrend will be illogical. However, there has been no logic in the pair's movements for quite some time. The market perceives the fundamental background one-sidedly, ignoring any data in favor of the dollar. The Non-commercial group of traders has opened 92,100 long positions and 42,600 short ones. I remain skeptical about the long-term growth of the pound sterling but speculators continue to buy and the pair continues to rise.   Analysis of GBP/USD 1H     On the 1H chart, the pound/dollar pair has started to correct, but has not yet broken the downtrend. Consolidation below the critical line may signal a resumption of the downward movement. We believe that there are no grounds for the sterling's growth, so we expect the decline to resume. Of course, that doesn't mean that the pair will fall every day. Periods of consolidation, flat movements, and corrections are possible. On August 7, traders should pay attention to the following key levels: 1.2520, 1.2598-1.2605, 1.2693, 1.2762, 1.2863, 1.2981-1.2987, 1.3050. The Senkou Span B (1.2868) and Kijun-sen (1.2734) lines can also be sources of signals, e.g. rebounds and breakout of these levels and lines. It is recommended to set the Stop Loss orders at the breakeven level when the price moves in the right direction by 20 pips. The lines of the Ichimoku indicator can move during the day, which should be taken into account when determining trading signals. There are support and resistance levels that can be used to lock in profits. On Monday, there are no important events or reports lined up in the UK and the US, except for perhaps Michelle Bowman's speech. However, it's a bit of a stretch to consider this event important. Therefore, we expect calm movements akin to a flat.   Description of the chart: Support and resistance levels are thick red lines near which the trend may end. They do not provide trading signals; The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, plotted to the 1H timeframe from the 4H one. They provide trading signals; Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals; Yellow lines are trend lines, trend channels, and any other technical patterns; Indicator 1 on the COT charts is the net position size for each category of traders; Indicator 2 on the COT charts is the net position size for the Non-commercial group.  

On the hourly chart, the GBP/USD pair reversed in favor of the US currency on Wednesday, consolidating below the corrective level of 38.2% (1.2477). However, this closure has not given bears anything, as today, the pair has returned to the zone between 1.2477 and 1.2513. If a rebound occurs from this zone, there is a high probability that the quote decline will resume toward the corrective level of 23.6% (1.2321). Closing above this zone will allow traders to expect a resumption of growth towards the Fibonacci level of 50.0% (1.2603).     The wave situation has become simpler and clearer. Waves still have a relatively large size, which adds inconvenience to trading. However, the trend is currently "bullish," and a breakthrough of the last low at 1.2372 is required to complete it. In this case, there will be signs of the pair transitioning to a "bearish" trend, which is more logical after a fairly strong rise. However, at the moment, the "bullish" trend persists, and bears cannot firmly establish themselves on the hard-won positions.   Late Tuesday evening in the US, the minutes of the last FOMC meeting were released. The report stated that the regulator would continue to make decisions based on incoming information. FOMC members almost unanimously agreed that tightening monetary policy should only continue in the case of unsatisfactory inflation dynamics. Not all policymakers are confident in a sufficiently restrictive policy to return inflation to 2%. None of the FOMC members voted for an increase or decrease in the interest rate. Thus, the Fed has again "left the door open" but has not provided any signals about future decisions. Inflation in the US decreased in October, which may further weaken the "hawkish" sentiment.   On the 4-hour chart, the pair reversed in favor of the pound and a new consolidation above the level of 1.2450. Thus, the growth process can be continued toward the next level at 1.2620. The upward trend corridor characterizes traders' sentiment as "bullish," and the "bullish" divergence on the CCI indicator warns of a possible continuation of the rise. Commitments of Traders (COT) Report:   The sentiment of the "Non-commercial" trader category for the last report is slightly less "bearish." The number of long contracts in the hands of speculators decreased by 6180 units, and the number of short contracts decreased by 10299 units. The overall sentiment of major players has long changed to "bearish," between the number of long and short contracts, the gap is increasing, but now in the opposite direction: 57 thousand versus 74 thousand. There are still excellent prospects for the pound to continue falling. I do not expect a strong rise in the pound soon. Over time, bulls will continue to get rid of buy positions, as is the case with the European currency. The growth we have seen in recent weeks is corrective. News Calendar for the US and the UK: UK - Manufacturing Purchasing Managers' Index (PMI) (09:30 UTC). UK - Services Purchasing Managers' Index (PMI) (09:30 UTC). On Thursday, the economic events calendar contains only two fairly interesting entries. The impact of the information background on market sentiment today may be weak. Forecast for GBP/USD and Trader Tips: I recommend selling the pound this week on a rebound from the zone of 1.2477– 1.2513 on the hourly chart with a target of 1.2321. Or on a rebound from the level of 1.2603. I advised buying the pair on a consolidation above the level of 1.2513 with targets of 1.2603 and 1.2620, but such deals look excessively risky to me. They should be closed at the first sign of doubt.

Bearish readings seen in the daily and hourly RSI momentum indicators have reinforced the weakening medium-term and short-term impulsive up moves of CHF/JPY. Watch the key short-term resistance at 169.65 for CHF/JPY. The major uptrend phase of the CHF/JPY has started to show signs of bullish exhaustion at this juncture which increases the risk of a multi-week corrective decline to retest its 50-day moving and the median line of a major ascending channel in place since 13 January 2023 low, acting at a support zone of 166.55/165.10.       Fig 1:  CHF/JPY major & medium-term trends as of 27 Nov 2023 (Source: TradingView, click to enlarge chart) The medium-term bullish momentum of CHF/JPY from the 3 October 2023 low of 160.00 has started to dissipate where the daily RSI momentum indicator has staged a recent bearish breakdown on 20 November and retested its former parallel support at the 60 level.     Watch the key short-term resistance at 169.65   Fig 2:  CHF/JPY minor short-term trend as of 27 Nov 2023 (Source: TradingView, click to enlarge chart)     In the shorter time frame as seen on the 1-hour chart, the price actions of CHF/JPY have started to oscillate within an impending minor descending channel from its recent all-time high print of 170.54 on 16 November 2023. Also, the hourly RSI momentum indicator has flashed out a bearish divergence condition at its overbought region. All in all, these observations have advocated the start of a potential multi-week corrective decline scenario for CHF/JPY. If the 169.65 key short-term pivotal resistance is not surpassed to the upside, the CHF/JPY cross pair may see a slide to retest the near-term support of 168.00 (also the 20-day moving average), and below it exposes the next intermediate supports at 166.55 and 165.90 next (also the 50-day moving average and the lower boundary of the minor descending channel). However, a clearance above 169.65 invalidates the bearish scenario for a retest on the 170.50 major resistance.   Fig