In my morning forecast, I paid attention to the levels 1.2034 and 1.2005 and recommended deciding on entering the market. Let's look at the 5-minute chart and figure out what happened there. An instant breakout of 1.2034 led to a sharp movement to the 1.2005 area, where I recommended opening long positions. A false breakdown there gave a buy signal, which allowed the bulls to quickly regain their positions after releasing fundamental statistics on the labor market. Fixing and a top-down test of 1.2034 is a direct signal to buy the pound, which, unfortunately, did not show a decent result but only led to fixing losses.
To open long positions on GBP/USD, you need:
In the second half of the day, we are waiting for statistics on the US real estate market, which may put pressure on the dollar since investors do not expect anything good from these indicators. The fact that the bulls have defended the monthly lows already speaks volumes, and today during the American session, it will be possible to count on a rebound of the pair. Of course, in the case of strong statistics, the pressure on the pound will return, but this will allow you to take another look at purchases at the lows. A false breakout at 1.2001 will signal the opening of long positions in the expectation of a correction. In this case, the target will be a new resistance at 1.2045, formed in the first half of the day. Its breakdown and the reverse test from the top down will take it to 1.2083, where the moving averages are playing on the sellers' side. A more distant goal will be a maximum of 1.2111, where I recommend fixing the profits. If there is a fall in GBP/USD and the absence of buyers at 1.2001, the estimated time will come for the bulls. The August low breakdown will direct the path to July's large support levels. Only a false breakout at 1.1967, the next support level, will form a buy signal and lead to an upward correction of the pair. It is possible to open long positions on GBP/USD immediately for a rebound from 1.1929 or even lower – around 1.1893 – with the aim of a correction of 30–35 points within a day.
To open short positions on GBP/USD, you need:
Bears still cope with all the tasks and do not experience special problems with buyers' responses. To protect the 1.2045 level in the afternoon, sellers will throw all their strength behind it since going beyond it will provide buyers with new support from major players. The optimal scenario for opening short positions will be a false breakdown in the area of 1.2045, which will put pressure on the pound to reduce to the nearest support of 1.2900, which was formed at the beginning of August this year. Bears need to close the day below this level, which will end buyers' efforts at the end of this summer. A breakout and a reverse test from the bottom up of 1.2001 will give an entry point for sale with a fall to 1.1967, and a more distant target will be the 1.1929 area, where I recommend fixing the profits. With the option of GBP/USD growth and the absence of bears at 1.2045, the bulls will have a real chance to continue the rally and update the monthly highs. In this case, I advise you not to rush with sales: only a false breakdown in the area of 1.2083 will give an entry point to short positions in the expectation of a rebound in the pair. If there is no activity, there may be a jerk up to the maximum of 1.2111, where you can open short positions immediately for a rebound, counting on the pair moving down by 30-35 points within the day.
The COT report (Commitment of Traders) for August 9 recorded a reduction in short positions and an increase in long ones, which led to a decrease in the negative delta. And although a less active reduction in UK GDP in the 2nd quarter of this year will allow us to expect that the economy will survive this crisis more steadily, households do not have to pay less on bills, which only exacerbates the cost-of-living crisis in the country. The talk that by the end of this year, the UK economy will slip into recession also does not give confidence to traders and investors. Do not forget how the GBP/USD pair is affected by the decisions of the Federal Reserve System. Last week it became known that inflation in the United States slowed down slightly – this is a good reason to look towards risky assets, but it is unlikely that this will lead to an increase in the bullish trend for the same pound. We will most likely remain within a wide side channel until the end of the month since we hardly have enough time to count on updates to monthly highs. The COT report indicates that long non-commercial positions increased by 12,914 to 42,219. In contrast, short non-commercial positions decreased by 9,027 to the level of 76,687, which led to a reduction in the negative value of the non-commercial net position to the level of -34,468 from the level of -56,409. The weekly closing price decreased to 1.2038 against 1.2180.
- 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.
