To open long positions on GBP/USD, you need:
Sellers of the pound did not postpone their goals, and successfully made their way below the support of 1.2620, which I mentioned in yesterday’s review and below which I advised opening short positions. If you look at the 5-minute chart, you will see how after the bull’s unsuccessful attempt to return to resistance 1.2706, the pressure on the pound increased, but a break and consolidation below 1.2620 only strengthened the bearish momentum, which remains at the current moment. You can see new landmarks on the hourly chart. The bulls urgently need to regain the resistance of 1.2615, a little above which the moving averages pass, so they will also have to resist. Consolidating at this level will be a signal to open long positions while expecting a return and update of a high of 1.2714, where I recommend taking profits. If pressure on the pound remains, and there are a number of reasons for this that we will discuss below, it is best to postpone long positions until the support update of 1.2503 is provided, provided that a false breakout is formed there, or buy GBP/USD immediately to rebound from a low of 1.2439 while expecting a correction of 30-40 points. A new COT report will be released today, in which the alignment of forces can seriously change. Throughout the week, I pointed to the high probability of completing the bullish impulse. The COT report for the last week of June showed an increase in short non-profit positions from 61,449 to 63,014, while long non-profit positions fell sharply from 39,192 , to the level of 26,970. As a result, the nonprofit net position became even more negative and turned out to be at -36,044, against -22,257, which indicated a slowdown of the short-term bullish momentum and a very likely formation of a large downward correction by the middle of this month.
To open short positions on GBP/USD, you need:
The sellers coped with the task yesterday and did not allow the bulls to form another wave of pound growth above the resistance of 1.2706. All that needs to be done in the morning is to keep the bulls above the level of 1.2615, form a false breakout there, which will signal opening new short positions in order to update the low of 1.2503. It is important to understand that while trading is conducted below 1.2615, the market will be on the side of sellers, and 1.2439 will be another target at the end of this week, where I recommend taking profits. Important data on the UK economy and industrial production for April this year will be released in the morning, which can only strengthen the bear market. If demand for the pound returns, and the bulls manage to regain the level of 1.2615, it is best to postpone short positions until the moving averages are updated, which act as resistance, or sell GBP/USD immediately for a rebound from the high of 1.2714 per 30-40 points correction within the day.
Signals of indicators:
Trading is carried out below 30 and 50 moving average, which indicates the formation of a downward correction in the pair.
Note: The period and prices of moving averages are considered by the author on the hourly chart H1 and differs from the general definition of the classic daily moving averages on the daily chart D1.
In case the pound grows in the morning, you can sell at a rebound from the upper border of the indicator at 1.2680. A break of the lower border at 1.2545 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 traders are speculators, such as individual traders, hedge funds and large institutions that use the futures market for speculative purposes and meet certain requirements.
- Long nonprofit positions represent the total long open position of nonprofit traders.
- Short nonprofit positions represent the total short open position of nonprofit traders.
- The total non-profit net position is the difference between short and long positions of non-profit traders.