To open long positions on GBPUSD, you need:
Unfortunately, I didn't see a false breakout at 1.2906. On the 5-minute chart, the pound rapidly went up and broke above the resistance of 1.2984, forming another entry point for long positions. As long as trading is conducted above this range, we can expect the continued growth of GBP/USD. The formation of another false breakout in the area of 1.2984 will confirm the signal to buy the pound. The main goal in this scenario will be to restore the pair to a new high of 1.3058, where I recommend taking the profit. If the pound returns to the support level of 1.2984 in the second half of the day, it is best not to rush to open long positions but wait for the results of the US presidential election, as well as the decline and test of the minimum of 1.2906, where the lower border of the new ascending channel may pass.
To open short positions on GBPUSD, you need:
However, the growth of the pound and the lack of activity in the area of 1.2984 indicates the uncertainty of sellers in the further decline of the pair. Now the bears need to regain the level of 1.2984. Fixing under it and testing it from the bottom up on the volume will signal the end of the upward correction, which will lead to a decrease in GBP/USD in the second half of the day. The main goal will be to update the major support of 1.2906, where I recommend fixing the profit. A longer-term goal will be the area of 1.2856, however, it will be possible to return to it only if Donald Trump completely wins the presidential election. In the scenario of growth of GBP/USD in the second half of the day, it is best to wait for the test of the maximum of 1.3058 and sell the pound immediately for a rebound in the expectation of a correction of 20-30 points within the day.
Let me remind you that in the COT reports (Commitment of Traders) for October 27, there was a reduction in both short and long positions. Long non-commercial positions fell from 39,836 to 31,799. At the same time, short non-commercial positions fell from 41,836 to 38,459. As a result, the negative non-commercial net position was at -6,660 against -2,000 a week earlier, which indicates that sellers of the British pound remain in control and have a minimal advantage in the current situation.
Signals of indicators:
Moving averages
Trading is conducted above 30 and 50 daily averages, which indicates the beginning of an upward correction of the pair.
Note: The period and prices of moving averages are considered by the author on the hourly chart H1 and differ from the general definition of classic daily moving averages on the daily chart D1.
Bollinger Bands
If the pound declines in the second half of the day, you can open long positions immediately on the rebound after testing the lower limit of the indicator in the area of 1.2870.
Description of indicators
- Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow.
- Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green.
- MACD indicator (Moving Average Convergence / Divergence - moving average convergence / divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9
- Bollinger Bands (Bollinger Bands). Period 20
- Non-profit speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements.
- Long non-commercial positions represent the total long open position of non-commercial traders.
- Short non-commercial positions represent the total short open position of non-commercial traders.
- Total non-commercial net position is the difference between the short and long positions of non-commercial traders.
