empty
21.11.2024 06:26 AM
Trading Recommendations and Trade Analysis for GBP/USD on November 21: The Pound Sterling Remains in a Flat

GBP/USD 5-Minute Analysis

This image is no longer relevant

The GBP/USD currency pair continued trading flat on Wednesday. Unlike EUR/USD, however, the flat in GBP/USD is more defined, with clear boundaries. Over the past week, price movements have oscillated between 1.2605–1.2620 and 1.2691–1.2701. The pair consistently tests the upper or lower boundary, providing traders with potential entry points. However, it's worth noting that indicators like Ichimoku lines lose their strength in a flat market.

Wednesday's only notable macroeconomic event was the UK Consumer Price Index (CPI). This report showed an annual inflation rate increase to 2.3%, slightly above expectations. Core inflation also rose to 3.3%, contrary to forecasts of a decline to 3.1%. This confirms Bank of England Governor Andrew Bailey's concerns about accelerating inflation. Consequently, the BoE will likely reduce rates even slower—a positive signal for the pound sterling.

However, Wednesday demonstrated that even strong economic data cannot significantly boost the pound. Despite having solid grounds for growth, the pair failed to break through the upper boundary of the horizontal channel, even when it was within proximity. This reinforces the likelihood of a sustained medium-term decline rather than a corrective rise.

Following the inflation report, the pair broke above the 1.2691–1.2701 range among trading signals. However, this signal turned out to be false. The price fell below this range within an hour, forming a signal aligned with the inflation report, which proved accurate. Subsequently, the pair dropped by 40 pips. However, Wednesday's price movements were neither easily predictable nor consistent.

COT Report

This image is no longer relevant

The COT reports on the British pound show that commercial traders' sentiment has been highly volatile in recent years. The red and blue lines representing the net positions of commercial and non-commercial traders frequently intersect and usually hover near the zero mark. The most recent downward trend coincided with the red line being below zero. Currently, the red line is above zero.

According to the latest COT report, the non-commercial group closed 700 BUY contracts and 11,700 SELL contracts. As a result, the net position of non-commercial traders grew by 11,000 contracts over the week. While the market is not rushing to sell the pound sterling in the medium term, the movements of the past six weeks are encouraging.

The fundamental backdrop still provides no basis for long-term pound purchases, and the pound has a realistic chance of resuming its global downtrend. However, on the weekly timeframe, there is an upward trendline. Until this trendline is broken, long-term expectations of a decline in the pound remain speculative. For now, the pound continues to demonstrate significant resilience against the dollar.

GBP/USD 1-Hour Analysis

This image is no longer relevant

The GBP/USD pair maintains a downward bias on the hourly timeframe. The previous upward trend has been invalidated, leaving further declines in the British currency as the most likely scenario, particularly sharp and prolonged ones. The recent correction turned into a flat range and has already ended. A new correction has started, supported by the 1.2605–1.2620 area, but it still looks more like a flat. There are no fundamental reasons to expect a significant rally in the pound sterling, and the inflation report failed to provide any meaningful support.

For November 21, we highlight the following important levels: 1.2429-1.2445, 1.2516, 1.2605-1.2620, 1.2796-1.2816, 1.2863, 1.2981-1.2987, 1.3050. Senkou Span B (1.2803) and Kijun-sen (1.2658) lines can also be sources of signals. Ichimoku indicator lines may shift throughout the day and should be monitored when generating signals. Place Stop Loss orders at breakeven once the price moves 20 pips in the desired direction to protect against potential losses from false signals.

Thursday's economic calendar in the UK and the US is light, with only a few minor reports expected. It is unlikely to happen today because Wednesday's much more significant data failed to break the horizontal channel. The pair is likely to remain within the same range.

Chart Explanations:

Support and resistance levels: thick red lines around which movement may end. They are not sources of trading signals.

Kijun-sen and Senkou Span B lines: Ichimoku indicator lines transferred from the 4-hour to the 1-hour timeframe. These are strong lines.

Extreme levels: thin red lines where the price previously rebounded. They are sources of trading signals.

Yellow lines: Trend lines, trend channels, and other technical patterns.

Indicator 1 on COT charts: The net position size for each category of traders.

Paolo Greco,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

GBP/USD: Trading Plan for the U.S. Session on February 21st (Review of Morning Trades)

In my morning forecast, I focused on the 1.2640 level as a key decision point. Looking at the 5-minute chart, a false breakout at this support level provided a solid

Miroslaw Bawulski 16:24 2025-02-21 UTC+2

EUR/USD: Trading Plan for the U.S. Session on February 21st (Review of Morning Trades)

In my morning forecast, I focused on the 1.0475 level as a key entry point. Looking at the 5-minute chart, we can see that a false breakout at this level

Miroslaw Bawulski 16:17 2025-02-21 UTC+2

How to Trade the GBP/USD Pair on February 21? Simple Tips and Trade Analysis for Beginners

Analysis of Thursday's Trades 1H Chart of GBP/USD The GBP/USD pair traded higher on Thursday, even though there weren't any fundamental or macroeconomic reasons for this increase. Earlier

Paolo Greco 06:44 2025-02-21 UTC+2

How to Trade the EUR/USD Pair on February 21? Simple Tips and Trade Analysis for Beginners

Analysis of Thursday's Trades 1H Chart of EUR/USD The EUR/USD currency pair continued to exhibit extremely low volatility on Thursday, primarily influenced by technical factors. After failing to break through

Paolo Greco 06:44 2025-02-21 UTC+2

Trading Recommendations and Analysis for GBP/USD on February 21: The Pound Is Rising Rapidly

On Thursday, the GBP/USD currency pair initially remained stagnant but surged by nearly 100 pips. Such strong movements are rare, even after Bank of England or Federal Reserve meetings. However

Paolo Greco 06:06 2025-02-21 UTC+2

Trading Recommendations and Analysis for EUR/USD on February 21: The Euro Started to Rise Again

On Thursday, the EUR/USD currency pair resumed its upward movement, rebounding for the fifth or sixth time from the trendline. We did not expect the price to fail again

Paolo Greco 06:06 2025-02-21 UTC+2

GBP/USD: Trading Plan for the U.S. Session on February 20th (Review of Morning Trades)

In my morning forecast, I highlighted 1.2590 as a key level for making trading decisions. Looking at the 5-minute chart, we can see that a break and retest of 1.2590

Miroslaw Bawulski 14:11 2025-02-20 UTC+2

EUR/USD: Trading Plan for the U.S. Session on February 20th (Review of Morning Trades)

In my morning forecast, I highlighted the 1.0441 level as a key decision point for market entry. Looking at the 5-minute chart, we can see that the pair attempted

Miroslaw Bawulski 14:08 2025-02-20 UTC+2

How to Trade the GBP/USD Pair on February 20? Simple Tips and Trade Analysis for Beginners

Analysis of Wednesday's Trades 1H Chart of GBP/USD On Wednesday, the GBP/USD pair continued to trade in a sideways manner. For the second consecutive day, traders had ample reason

Paolo Greco 06:29 2025-02-20 UTC+2

How to Trade the EUR/USD Pair on February 20? Simple Tips and Trade Analysis for Beginners

Analysis of Wednesday's Trades 1H Chart of EUR/USD On Wednesday, the EUR/USD currency pair continued to experience minimal volatility and a downward trend. Throughout the day, several macroeconomic reports were

Paolo Greco 06:29 2025-02-20 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.