In the first half of the day, several interesting signals were formed to enter the market from the same level. Let's look at the 5-minute chart and figure out what happened. In my morning forecast, I paid attention to 1.2156. At the first test of this range, the bulls managed to achieve a false breakdown, which led to a signal to open long positions. As a result, the pair went up about 40 points - quite good considering the bear market. Then the sellers achieved a breakdown and a reverse test of 1.2156 - a sell signal according to my morning strategy. As a result, the pound collapsed to 1.2107 and continues to fall at the time of writing. At a minimum, you can take about 50 points of profit. And what were the entry points for the euro this morning?
To open long positions on GBP/USD, you need:
Given that the bears have already updated the annual lows, most likely, the data on producer prices in the United States will lead to a new major sale of the trading instrument. To do this, the figures should exceed all forecasts of economists. Only the formation of a false breakdown at 1.2107, for which there is still some hope, will lead to the first signal to open long positions in the calculation of an upward rebound. An equally important task for the bulls in the second half of the day will be to bring the new resistance of 1.2153 under control, which will be quite difficult to do in the current conditions. A breakout and a reverse test from top to bottom of 1.2153 will reduce the pressure and allow you to return to 1.2204, where I recommend fixing the profits. Most likely, it is in this range that large static sellers are located, counting on building the upper border of the side channel in the event of another correction of the pair. A more distant target will be the 1.2265 area, just below which the moving averages playing on the side of the bears pass. In the event of a further decline in the pound, which is more likely, as well as the absence of buyers at 1.2107, the pressure on the pair will only increase. This will open the road to 1.2068. For this reason, I advise you not to rush purchasing. It is best to enter the market after a false breakdown at this level. I do not advise buying GBP/USD immediately on the bounce, only a false breakout in the area of 1.2030 will allow you to count on a correction of 30-35 points within a day.
To open short positions on GBP/USD, you need:
Of course, a breakout and consolidation below 1.2107 would be a good entry point into short positions. But do not forget that the Fed meeting is tomorrow and that it is necessary to prepare for it properly. Against this background, there will be much fewer people willing to force events than at the end of last week. The optimal scenario for today's sale will be the formation of a false breakdown in the area of 1.2153, by analogy with what I discussed above. If the bears push through 1.2107, new stop orders of the bulls will come into play and the pair will instantly collapse to new lows. The reverse test from the bottom up of 1.2107 will form an additional sell signal, allowing you to dump GBP/USD in the area of 1.2068, from which there is a direct road to 1.2030, where I recommend fixing the profits. The longer-term goal will be a minimum of 1.1984 - this scenario is realized only with unexpected statements by Fed representatives about the need to raise interest rates by 0.75% at once. With the option of GBP/USD growth and lack of activity at 1.2153, an upward jerk may occur against the background of the demolition of bulls' stop orders. In this case, I advise you to postpone short positions to 1.2204. I advise you to sell the pound there only if there is a false breakdown. Short positions can be made immediately for a rebound from 1.2265, or even higher - from 1.2315, counting on the pair's rebound down by 30-35 points inside the day.
The COT report (Commitment of Traders) for June 7 recorded a large increase in long positions and only a small increase in short ones. However, as I think you understand, at the moment the picture is completely different: the last three trading days have turned the market upside down. The further direction of the pair, which is in the area of annual lows, depends on the meeting of the Federal Reserve System and the decisions taken at it. A more aggressive policy will push GBP/USD further down, as the UK economy, as the latest data showed, is gradually reducing the growth rate, which does not give confidence to investors. The meetings of the Bank of England are unlikely to help the pound in any way since the regulator will not abandon the policy of raising rates. I very much doubt its further aggressive actions aimed at combating inflation by sacrificing the growth rate of the economy. Although the governor of the Bank of England, Andrew Bailey, continues to say that the regulator is not going to give up on raising interest rates yet, there are also no hints of a more aggressive approach to monetary policy. The COT report indicates that long non-commercial positions increased by 3,830 to the level of 34,618, while short non-commercial positions increased by 535 to the level of 105,428. This led to a decrease in the negative value of the non-commercial net position from the level of -74,105 to the level of -70,810. The weekly closing price rose from 1.2481 to 1.2511.
- 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 to 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.
