To open long positions on GBP / USD you need:
In my morning forecast, I paid attention to the level 1.3892 and recommended making a decision based on it. Let’s look at the 5-minute chart and understand the entry points: after a small downward correction of the pair in the first half of the day in this range, the bulls achieved a false breakout there, where I recommended opening long positions in the morning. As a result, the upward movement was about 35 points, which is quite good for intraday trading. Closer to lunchtime, the bears returned the pair back to the level of 1.3892 and achieved its breakdown.
In the second half of the day, you need to act with extreme caution, since it is far from clear where the trend will continue, especially if the level 1.3892 is rather “smeared” and as clear as in the morning it no longer works. Only a return and test of the level of 1.3892 from top to bottom on the volume will allow to build up long positions, which generates a signal to buy the pound, counting on an increase to a maximum of 1.3944. A further target will be the area of 1.4000, where I recommend taking profits. If the pressure on the pound persists in the afternoon, I recommend not to rush into purchases: the optimal scenario would be a test of the large support at 1.3838, which was formed last Friday. From this level, you can buy the pound immediately on a rebound, counting on a correction of 20-25 points within the day.
To open short positions on GBP / USD you need:
The sellers did manage their task and achieved a breakdown of the support at 1.3892. In the afternoon, it is necessary to wait for the test of this level from the bottom up. With or without a false breakout, an update of the level 1.3892 from the reverse side should lead to the formation of a signal to open short positions in the continuation of the downward trend in the pound to the support area of 1.3838. It will be possible to speak of a breakdown of this range only after good data on the American economy, which may push the pair even lower – to the 1.3792 area, where I recommend taking profit. Under the scenario of the return of control by the bulls over the level of 1.3892, the best option would be to sell the pound only on a rebound from a large local maximum of 1.3944, counting on a downward correction of 20-25 points within the day. The next major selling resistance is seen around 1.4000.
I recommend that you familiarize yourself with my video forecast for today.
EUR / USD: plan for the American session on April 26 (analysis of morning deals). Bears seek breakout at 1.2089, stopping the bull market
Let me remind you that the COT reports (Commitment of Traders) for April 13 recorded an increase in both long and short positions, while the total non-commercial net position increased, which indicates a higher activity of pound buyers. Good fundamental data, which have recently been released on the UK economy, once again prove that there is a fairly high probability of strong economic growth rates in the 2nd quarter of this year, which will further contribute to the growth of the British pound in the medium term. The Bank of England has long been talking about how to proceed with stimulating monetary policy, as additional inflation concerns will arise as the economy grows. The growth of the pound at the beginning of this week once again proves its attractiveness for large players and, most likely, the bull market will only gain momentum by this summer. The COT report indicated that long non-commercial positions rose from 45,270 to 52,851. At the same time, short non-commercials increased from 25,219 to 27,261, bringing the non-commercial net position to 25,590 from 19 951 weeks earlier. On the contrary, the weekly closing price dropped to 1.3753 from 1.3913.
Trading is carried out in the 30 and 50 day averages, which indicates an attempt by the bears to regain control of the market.
Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart.
The fall of the pound will be stopped in the area of the lower border of the indicator in the area of 1.3860.
Description of indicators
- Moving average (moving average, determines the current trend by smoothing volatility and noise). Period 50. Marked in yellow on the chart.
- Moving average (moving average, determines the current trend by smoothing volatility and noise). Period 30. Marked in green on the chart.
- MACD indicator (Moving Average Convergence / Divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9
- Bollinger Bands Period 20
- Non-commercial traders are speculators such as individual traders, hedge funds and large institutions who 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.
- Non-commercial short positions represent the total short open position of non-commercial traders.
- The total non-commercial net position is the difference between short and long positions of non-commercial traders.