Bullish Bias in 1H Chart of GBP/USD with Potential for Uptrend, Overvaluation Concerns, and Key Trading Levels
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1H chart of GBP/USD
In the 1-hour chart, GBP/USD maintains a bullish bias, although it is correcting at the moment. The ascending trend line serves as a buy signal. However, we still believe that the British currency is overvalued and should fall in the medium term. The pair overcame the downward trend line, so the pound has an opportunity to show another round of the uptrend. So far, it has not crossed the Senkou Span B line, but it is the last line of defense on the way to a new uptrend. On July 5, trading levels are seen at 1.2349, 1.2429-1.2445, 1.2520, 1.2598-1.2605, 1.2693, 1.2762, 1.2863, 1.2981-1.2987. The Senkou Span B (1.2726) and Kijun-sen (1.2662) may also generate signals when the price either breaks or bounces off them.
A Stop Loss should be placed at the breakeven point when the price goes 20 pips in the right direction. Ichimoku indicator lines can move intraday, which should be taken into account when determining trading signals. There are also support and resistance which can be used for locking in profits. On Wednesday, services PMI numbers for the UK in the second estimate for June will be released. Not the most significant indicator. We have the FOMC minutes for release in the US, which rarely contains important information.
The pair will likely go through low volatility, but as we can see, the lack of news does not prevent the pound from continuing to rise against the USD.
Indicators on charts:
Resistance/support - thick red lines, near which the trend may stop.
They do not make trading signals.
The Kijun-sen and Senkou Span B lines are the Ichimoku indicator lines moved to the hourly timeframe from the 4-hour timeframe.
They are also strong lines. Extreme levels are thin red lines, from which the price used to bounce earlier.
They can produce trading signals. Yellow lines are trend lines, trend channels, and other technical patterns.
Indicator 1 on the COT chart is the size of the net position of each trader category.
Indicator 2 on the COT chart is the size of the net position for the Non-commercial group of traders.
