To open long positions on GBPUSD, you need:
In my morning forecast, I recommended opening short positions when a false breakout is formed in the resistance area of 1.3395, which happened. On the 5-minute chart, the bulls made an unsuccessful attempt to grow above the level of 1.3395, after which a sell signal was formed for the pound, which brought the pair to the support area of 1.3354, where the downward trend first stopped. Now the bulls are trying their best to protect this range, however, without good news on Brexit, it will be extremely difficult to do this.
As a result of all the movements, the technical picture remained completely unchanged. Only if a false breakout is formed in the support area of 1.3354, buyers will be able to form a signal to open long positions in the expectation of a resumption of the bull market. In this case, the goal will be to re-update the maximum of 1.3395, on which the pair's further upward movement now depends. Fixing above 1.3395 will open up a real prospect for GBP/USD to update the highs of 1.3453 and 1.3509, where I recommend fixing the profits. However, such a large increase will occur only in the case of good news on Brexit, since there are no important fundamental statistics in the afternoon, and American markets will be closed due to the Thanksgiving holiday. Low trading volume can cause weak market volatility. If the bulls do not show any activity in the area of 1.3354, and a repeated test will lead to a breakdown of this range, I recommend returning to buying the pound only for a rebound from the minimum of 1.3305, based on a correction of 20-30 points within the day.
To open short positions on GBPUSD, you need:
Breaking the level of 1.3354 is the primary task of the bears for the second half of the day. During the first test of this area, there was a rebound upward, therefore, only a consolidation below 1.3354 with a test of this level from the bottom up, similar to yesterday's entry point into short positions, will return new large sellers to the market, which will quickly push GBP/USD to the area of the 1.3305 minimum, which has been actively defending recently. It will be possible to talk about the resumption of the bear market only after the breakdown of this range, which will lead to the demolition of several stop orders from buyers and a rapid movement of the pair down to the area of 1.3251, where I recommend fixing the profits. If in the second half of the day the bulls will be able to defend the area of 1.3354, then it is better not to rush with sales. Only another return with the formation of a false breakout in the resistance area of 1.3395 will be a signal to open short positions. If there is no noticeable activity of sellers, it is best to abandon short positions before updating the new maximum in the area of 1.3453, where you can sell the pound immediately on the rebound with 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 November 17, there was a reduction in long positions and a sharp influx of short positions. Long non-commercial positions declined from 27,872 to 27,454. At the same time, short non-commercial positions rose from 45,567 to 47,200. As a result, the negative non-commercial net position was -19,746, against -17,695 weeks earlier, which indicates that the sellers of the British pound retain control and their preponderance in the current situation. Lack of clarity on the trade agreement, together with the lockdown of the British economy in November this year, clearly does not add optimism and confidence to the buyers of the pound.
Signals of indicators:
Moving averages
Trading is conducted around 30 and 50 daily averages, which indicates the sideways nature of the market in the absence of important statistics.
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 the classic daily moving averages on the daily chart D1.
Bollinger Bands
A break in the lower limit of the indicator around 1.3354 will lead to a new wave of falling of the pound. A break of the upper limit in the area of 1.3395 will form a new upward trend.
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.
