To open long positions on GBP/USD, you need:
In my morning forecast, I paid attention to the level of 1.3693 and recommended that you make decisions on entering the market from it. Let's look at the 5-minute chart and figure out what happened in the end. The first resistance test of 1.3693 led to the formation of a false breakdown at this level, which was quite a good signal to open short positions in the continuation of the bear market that formed at the end of last week. However, it did not come to a major sell-off, and after a while the bulls achieved a breakdown of 1.3693, following stop orders. The reverse test of this level from top to bottom formed an entry point already in long positions, which continues to work out at the time of writing the forecast. From a technical point of view, there are some changes that you should pay attention to. During the US session, we are waiting for another speech by representatives of the Federal Reserve System, who may touch on the topic of monetary policy and tip the scales in favor of buyers of the US dollar - this will put pressure on the GBP/USD pair. If no important topics are raised during the interview, the pound will have every chance to continue growing. A breakout and a reverse test from the top-down of the level of 1.3706, which was formed in the first half of the day, will form a new entry point for long positions in the expectation of a further jump of the pound up to 1.3747, where I recommend fixing the profits. A more distant target will be the area of 1.3774. If the pressure on GBP/USD returns during the US session, and the bulls do not show anything in the resistance area of 1.3706, it is best to shift their attention to protecting the new support of 1.3661. The formation of a false breakdown will be a signal to open long positions to continue the growth of the pound. The lower boundary of the new ascending channel formed last Thursday also passes there. If the bears turn out to be stronger at the level of 1.3661, I advise you not to rush with long positions. The optimal scenario will be the purchase of the pound from the level of 1.3614. I advise you to open long positions in GBP/USD immediately for a rebound in the area of 1.3575 with the aim of an upward correction of 15-20 points within the day.
To open short positions on GBP/USD, you need:
Sellers of the British pound failed to cope with their task and failed to offer anything below the lows of last Friday, which forced them to retreat. Now, their focus will be on protecting the resistance of 1.3706. Only the formation of a false breakdown at this level in the second half of the day will return pressure on the pair, which will push it back to the minimum of 1.3661. A breakout and a test of this area from the bottom up will form an additional entry point into short positions, which will bring GBP/USD even lower - to 1.3614. It will be possible to talk about such a strong bear market in the case of hawkish statements by representatives of the Federal Reserve System on the topic of tightening monetary policy. The farthest target for today will be a new low of 1.3575. In the absence of active actions of bears around 1.3706, I advise you to postpone sales to a large resistance of 1.3747. I also recommend opening short positions from there only if a false breakdown is formed. You can sell GBP/USD immediately on a rebound from the maximum in the area of 1.3774, counting on a downward correction of 25-30 points within the day.
The COT reports (Commitment of Traders) for September 14 recorded a sharp positive dynamics of the net position and a fairly large influx of long non-commercial positions, along with a reduction in short ones. And although the British pound remains under pressure in pair with the US dollar, a clear decline in the trading instrument indicates a fairly high interest in long positions from major players. It is quite possible that the sharp increase in inflation in the UK last week forced many traders to reconsider their attitude to the monetary policy of the Bank of England in the direction of its possible tightening. However, the fact that representatives of the Bank of England are in no hurry to talk about these changes affects the activity of traders. I advise you to continue to adhere to the strategy of buying the British pound with any good decline. The lower the pound falls, the more active buyers of risky assets will begin to show themselves, betting on real changes in the monetary policy of the Bank of England in the future. The COT report indicates that long non-commercial positions rose sharply from the level of 29,348 to the level of 44,161, while short non-commercial positions decreased 53,872 to the level of 39,371, which indicates a preponderance towards the buyers of the pound and the leveling of the market situation. As a result, the non-commercial net position returned to a positive value and increased from the level of -24,524 to 4,790 a week earlier. The closing price of last week was almost unchanged and amounted to 1.3837 against 1.3838 a week earlier.
Signals of indicators:
Moving averages
Trading is conducted around 30 and 50 daily averages, which indicates some market uncertainty.
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 of the upper limit of the indicator in the area of 1.3706 will lead to a new wave of growth of the pound. A break of the lower limit of the indicator in the area of 1.3655 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 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.
