FX.co ★ GBP/USD: trading plan for the US session on November 21st (analysis of morning deals). Pound buyers remain hopeful

In my morning forecast, I drew attention to the level of 1.2543 and recommended making entry decisions based on it. Let's look at the 5-minute chart and analyze what happened. Growth occurred in the first half of the day, but a false breakthrough at this level did not materialize due to low market volatility. For this reason, I did not wait for entry points. The technical picture remained unchanged for the second half of the day.

To open long positions on GBP/USD, it is required:

Data on home sales volume in the secondary market is unlikely to greatly concern traders, unlike the FOMC meeting minutes for November. From it, we will learn, as if we did not know before, where the central bank is planning to move next. Only a hawkish protocol will pressure the pound, leading to a sharp decline in the pair. If this happens, buyers will have to show themselves around 1.2500, where the moving averages are slightly below, playing on their side. Forming a false breakthrough will provide an entry point with the growth target to the resistance at 1.2543. A breakthrough and a top-down test of this range will strengthen the chance of recovery, forming a signal to buy and allowing it to reach a new resistance at 1.2581. In case of a breakout above this range, we can talk about a leap to the maximum of 1.2626, where I will take profit. In the scenario of GBP/USD falling and the absence of buyers at 1.2500 in the second half of the day, sellers will have a chance to build a small downward correction. If this happens, I will postpone long positions until testing the support at 1.2455, formed by the results of yesterday's trading. Buying there will only be on a false breakout. I recommend opening long positions on GBP/USD immediately on a rebound from 1.2375, with a correction target of 30-35 points within the day.

To open short positions on GBP/USD, it is required:

If we look at the chart, the bears did not try to do anything special in the first half of the day today, as many are betting on further growth in risk assets after the publication of the FOMC protocol. For this reason, before selling, it would be nice to see the protection of the resistance at 1.2543. The formation of a false breakthrough at this level will confirm the presence of large sellers in the market, forming a signal to open short positions in anticipation of a decline in the pair and an update of support at 1.2500, formed by the results of yesterday's trading. A breakthrough and a reverse test from the bottom to the top of this range will increase pressure on the pair, returning the advantage to the bears and providing an entry point for selling to update 1.2455, where I expect more active buying. The more distant target will be the minimum of 1.2411, where I will take profit. In the case of GBP/USD growth and the absence of bears at 1.2543 in the second half of the day, bulls will maintain the advantage, leading to a movement of the pair towards the next resistance at 1.2581. I will only sell there on a false breakout. In the absence of activity there, I also recommend opening short positions on GBP/USD from 1.2626, counting on a rebound of the pair downwards by 30-35 points within the day.

In the COT report (Commitment of Traders) for November 14, there was a decrease in long positions and an increase in short positions, but this did not particularly change the balance of power. Pressure on the pound is gradually decreasing, which is not surprising, as inflation in the UK and the US rapidly declines, and the chances that the Bank of England will continue raising interest rates are practically zero. This helps risk assets and weakens the position of the US dollar. Ahead of us is the November protocol of the Federal Reserve meeting, which can clarify everything, leading to another wave of strengthening the British pound and consolidating at monthly highs. The more talks there are about the fact that in December of this year, interest rates in the US may remain unchanged, the stronger the pressure on the US dollar and the more expensive the pound will be. In the last COT report, it is stated that long non-commercial positions decreased by 4,735 to the level of 52,797, while short non-commercial positions increased by 6,743 to the level of 80,527. As a result, the spread between long and short positions decreased by 190. The weekly price increased sharply and reached 1.2503 against 1.2298.

Indicator Signals:

Moving Averages

Trading is conducted above the 30 and 50-day moving averages, indicating a likelihood of pound growth.

Note: The author considers the period and prices of moving averages on the hourly chart H1 and differs from the general definition of classic daily moving averages on the daily chart D1.

Bollinger Bands

In case of a decrease, the lower boundary of the indicator, around 1.2500, will act as support.

Description of Indicators:

• Moving Average (determines the current trend by smoothing volatility and noise). Period 50. Marked on the chart in yellow.
• Moving Average (determines the current trend by smoothing volatility and noise). Period 30. Marked on the chart in green.
• MACD Indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages). Fast EMA period 12. Slow EMA period 26. SMA period 9.
• Bollinger Bands. Period 20.
• Non-commercial traders - speculators, such as individual traders, hedge funds, and large institutions using the futures market for speculative purposes and meeting 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 positions of non-commercial traders.
• The total non-commercial net position is the difference between non-commercial traders' short and long positions.