Forex Traders Reviews Trading Plan
26.12.2011:25 Forex Analysis: Trading Plan for GBP/USD pair for the week of December 28-31. But the BRITISH economy will continue to suffer losses as a result of Brexit.
Up to 09:00 2020-12-28 UTC-00GBP / USD 24H.GBP /USD currency pair is still under storm this week. Sterling’s volatility this week was 311 points – 166 – 219 – 128. So the pound traded very actively, which is not surprising, because at the beginning of the week the markets were shocked by the news of a new strain of “coronavirus” that began hitting the UK, with which all messages from the good half of the world were immediately closed and in which a tightening of quarantine was announced, and by the end of the week it became known that London and Brussels had still agreed a trade agreement. So, at the beginning of the trading week, the pound fell sharply, but after a few days it rose again to 2.5-year highs and closed the week near them. Therefore, at the moment there is no technical reason to assume that the upward trend is complete or coming to an end. The basic background is still to send a few points down to 500-600, even though a trade agreement is reached. After all, sterling has grown almost the same before. Yes, the euro has also been rising, so we can assume that the problem was low demand for the US dollar. However, sterling has also felt unnecessarily good in recent months. Undeserved good. Thus, we are still waiting for the start of a new downward trend and we still recommend waiting for technical confirmation of this hypothesis, and only then consider trading on the decline.CHT report.In the last week of reporting (8-14 December), the GBP/USD rose by 80 points. Slight price changes, but overall the pound remains a steady upward trend. However, the latest COT report once again gives us data that does not allow us to draw any concrete conclusions or forecasts. The changes were again minimal and contradictory. Professional traders closed 4,000 purchase agreements and 2,300 sales contracts during the reporting week. Thus, the net position of the most important group of traders decreased by 2.3 thousand, or slightly. This means that the mood of the big players has become more bearish. But it is now best to pay attention to the first indicator to understand what is happening to the mood of non-profit entrepreneurs. Green Line (as well as red) constantly changes the direction of movement: up, down. This is precisely because of the lack of a clear and firm attitude of the ‘Non-Commercial’ group. Therefore, no conclusions can be drawn at all. The pound has been rising for three months (and this is only the latest round of upward movement), but COT reports do not say that at the moment sentiment among non-profit investors has become more bullish. And even that every group of entrepreneurs at that time actively increased purchases of the pound. A new COT report on Friday was not released due to Catholic Christmas. The basic background offor the GBP/USD pair this week was extremely strong. I cannot believe that the trade agreement has ended positively for both sides. It seems that both London and Brussels will continue to trade with each other without quotas and duties after Brexit on 31 December 2020, which is certainly great news for both Europeans and Britons. It’s a small thing. It is necessary that the European and British parliaments can now ratify the agreement reached. It is already known that the British Parliament will meet at an extraordinary meeting on 30 December and the European Parliament as early as next year, but the agreement will continue to enter into force on the European side, thanks to the special powers of the European Council, which is likely to introduce it for ‘temporary use’. This means that you actually approve it “in hindsight”. However, many experts remain sceptical about the prospects for the UK economy. In principle, it was already known before the agreement that the BRITISH economy would in any case suffer very much from Brexit (and began to suffer losses four years ago), only with a trade agreement these losses would be less. Now we can only understand what the economic losses from Brexit will be. In the fourth fiscal quarter, the UK economy is likely to contract again due to a “blockade” in November and December and quarantine due to a new strain of “coronavirus” in December. Therefore we continue to expect the UK pound to fall.Trading plan for the week of December 28 -December 31:1) Price without any problems maintains an upward trend and for the second time worked the first resistance level of 1.3526. So, in a 24-hour period, the next target for upward movement is 1.3734. We recommend that you continue to consider opening long positions at lower time intervals and do not try to guess the end point of the upward trend.2) Sellers are still quite weak. This week, the Bears tried to take the lead, but ultimately ended in another setback. Therefore, in order to be able to open short positions, it is now recommended to wait at least once below the critical line. If this condition is met, the downward trend may develop within a 4-hour period.Illustration Explanations:Price support and resistance (resistance/support) – levels that are targets when opening purchases or sales. Take Profit levels can be placed near them.Ishimoku Ratios, Bollinger Bunds, MACD.Support and resistance areas are areas from which the price has repeatedly rebounded.Indicator 1 on COT charts is the net position size of each category of traders.Indicator 2 on COT charts is the net position size of a non-commercial group. This market analysis is informative and is not a transaction guide.Respect,Analyst: Stanislav Polyanskygk InstaForex © 2007-2020