To open long positions on GBP/USD, you need:
In my morning forecast, I paid attention to the level of 1.3553 and recommended making decisions on entering the market. Let's take a look at the 5-minute chart and figure out the entry points. An unsuccessful attempt to rise above 1.3553 in the first half of the day led to the formation of an excellent signal to open short positions. As a result, at the time of writing, the pair has gone down more than 25 points. Most likely, the sellers of the pound will count on updating the average border of the side channel, which we will talk about a little below. From a technical point of view, nothing has changed. Accordingly, the strategy for the second half of the day remains the same. And what were the entry points for the euro this morning?
The primary task of buyers for today remains the protection of the new support of 1.3510, in the area of which the moving averages are playing on the side of the bulls. This level is very important, as its breakdown can force traders to take profits from the highs, which will lead to the formation of pressure on the pound and move trading within the wide side channel 1.3431-1.3553. The formation of a false breakdown at 1.3510 forms a signal to buy GBP/USD with the prospect of continuing the bull market aimed at breaking 1.3553, which could not be done in the first half of the day. A breakdown and test of this level from top to bottom will give an additional entry point and strengthen the position of buyers to continue building a bullish trend and update the highs: 1.3605 and 1.3649. A more distant target will be the 1.3694 area, where I recommend fixing the profits. However, such a large growth can be counted on only with the publication of very weak data on the American economy. In the scenario of a decline in the pound during the US session and a lack of activity at 1.3510, it is best to postpone purchases to the level of 1.3471. Only the formation of a false breakdown there will give an entry point in the expectation of maintaining bullish momentum. You can buy GBP/USD immediately on a rebound from 1.3431, or even lower - from a minimum of 1.3409, counting on a correction of 20-25 points within a day.
To open short positions on GBP/USD, you need:
While trading is below 1.3553, we can count on a larger decline in the pair. The primary task of the bears for today remains the protection of this range, which they coped with perfectly in the first half of the day. Given the release of several important fundamental statistics on the United States, and we are talking about labor market data and the minutes of the December meeting of the US Federal Reserve System, only another form of a false breakdown at this level forms the first entry point into short positions, followed by a decline in the pair to the area of 1.3510, for which we will have to fight hard since the bulls do not intend to let go of the upward trend at the beginning of this year. A breakdown of 1.3510 and a reverse test from the bottom up will increase pressure on the pound and dump it to the next support of 1.3471. Only the consolidation and the reverse test of 1.3471 from the bottom up will give a new entry point into short positions with the prospect of a decline in GBP/USD by 1.3431 and 1.3409, where I recommend fixing the profits. If the pair grows during the American session and sellers are weak at 1.3553, it is best to postpone sales to a larger resistance at the base of the 36th figure. I also advise you to open short positions there only in case of a false breakdown. It is possible to sell GBP/USD immediately for a rebound from a large resistance of 1.3649, or even higher - from a new maximum in the area of 1.3694, counting on the pair's rebound down by 20-25 points inside the day.
In the COT reports (Commitment of Traders) for December 21, a reduction in both short and long positions was recorded. Considering that long positions have shrunk much more - this has only increased the negative value of the delta. The data take into account the meeting of the Federal Reserve System and the Bank of England, however, we remember that the pound declined strongly after the rapid growth that occurred due to the increase in interest rates. If you look at the overall picture, the prospects for the British pound look pretty good. The Bank of England's decision to raise interest rates continues to fuel the markets with new buyers, and a more aggressive policy of the regulator next year will certainly strengthen the bullish trend for the GBPUSD pair. High inflation remains the main reason why the Bank of England will continue to raise interest rates. On the other hand, the US dollar also has supported: The Federal Reserve system plans to raise interest rates in the spring of next year, which makes the US dollar more attractive. The COT report for December 21 indicated that long non-commercial positions fell from the level of 29,497 to the level of 20,824, while short non-commercial positions fell from the level of 80,245 to the level of 78,510. This led to an increase in the negative non-commercial net position from -50,748 to -57,686. The weekly closing price has hardly changed: 1.3209 versus 1.3213 a week earlier.
Signals of indicators:
Moving Averages
Trading is conducted above 30 and 50 daily moving averages, which preserves the chance of further growth of the pound in the short term.
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
In case of a decline in the pair, the average border of the indicator around 1.3510 will act as support. A breakthrough of the upper limit of the indicator in the area of 1.3545 will lead to a new wave of growth of the pound.
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.
