To open long positions on GBP/USD, you need to:
In my morning forecast, I paid attention to the level of 1.3892 and recommended making a decision. Let's look at the 5-minute chart and figure out the entry points. To my regret, we did not achieve the renewal of this resistance, which did not allow us to form a good entry point into short positions. The focus will now be on data on the US economy, which will lead to a surge in volatility in the afternoon.
From a technical point of view, nothing has changed. To continue the bull market, buyers need a breakout of the level of 1.3892. Fixing on it with a top-down test forms a good entry point into long positions, which can lead GBP/USD to the area of the maximum of 1.3944, where I recommend taking the profits. A breakout and consolidation above this range, with a test of it from top to bottom, will push the pound already to a one-month high in the area of 1.4000. In the case of a decline in the pound in the second half of the day after strong data on activity in the US, it is best not to rush to buy. The formation of a false breakout in the area of 1.3834 will lead to a good entry point into long positions to return to the resistance of 1.3892. Suppose there is no activity in the area of 1.3834. In that case, the best option is to open long positions immediately on a rebound from the new local low of 1.3792, or even lower - in the area of 1.3749 in the expectation of an upward correction of 25-30 points within the day.
To open short positions on GBP/USD, you need to:
Sellers of the pound need to think about how to protect the resistance of 1.3892. Strong fundamental data on the US economy should lead to a false breakout, which will form an entry point into short positions and push the GBP/USD back to the support of 1.3834. However, only a break and consolidation below this range with a test of it from the bottom up will form a new signal to open new short positions already in the expectation of a further fall in GBP/USD to a minimum of 1.3792. A more distant goal will be the support of 1.3749, where I recommend fixing the profits. In the absence of activity on the part of sellers in the resistance area of 1.3892, it is best not to rush with sales. In this case, I advise you to postpone short positions until the test of the maximum of 1.3944, where you can open short positions immediately for a rebound in the expectation of a downward correction of 25-30 points within the day. In the area of 1.3944, a large static seller is sitting, which will not let the pound go higher at the end of the week.
Let me remind you that the COT reports (Commitment of Traders) for April 13 recorded an increase in both long and short positions, while the total non-commercial net position increased, which indicates a higher activity of buyers of the pound. The good fundamental data that has recently been released on the UK economy proves a relatively high probability of strong economic growth in the 2nd quarter of this year, which will continue to contribute to the growth of the British pound in the medium term. The Bank of England has long been talking about how to proceed with a stimulating monetary policy since as the economy grows, there will be additional problems with inflation. The pound's growth earlier this week once again proves its attractiveness to significant players, and most likely, the bull market will only gain momentum by the summer of this year. The COT report shows that long non-profit positions rose from 45,270 to the level of 52,851. Simultaneously, the short non-profit rose from the level of 25,219 to the level of 27,261, bringing the non-profit net position up to the level of 25,590 from the level of 19,951 a week earlier. The weekly closing price, on the contrary, fell to 1.3753 from 1.3913.
Signals of indicators:
Moving averages
Trading is conducted around 30 and 50 daily averages, which indicates that the bulls are trying to rehabilitate themselves at the end of the week.
Note: The period and prices of the 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 of the average border of the indicator in the area of 1.3850 will increase the pressure on the pair.
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, use the futures market for speculative purposes and meet specific 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.
