Black Pipper

Forex Dreamers

Plan for the European session on April 22. Commitment of Traders COT reports

To open long positions on GBP / USD you need:

Yesterday was a profitable day for trading the British pound. Let’s take a look at the 5-minute chart and take a look at all the trades that were formed throughout the day. In my morning forecast, I paid attention to the level 1.3944 and recommended making decisions based on it. Nondescript fundamental statistics on inflation growth in the UK and a false breakout of the 1.3944 level – all this led to the formation of a good entry point for short positions. As a result, there was a move down to the target level 1.3892, where I recommended taking profits. The movement was about 50 points. Then, in my forecast for the second half of the day, I advised to buy the pound when a false breakout was formed from the level of 1.3892, and everything happened with the same accuracy as during the European session, only in the opposite direction. The bulls did not hesitate and the unsuccessful consolidation of bears below 1.3892 formed an excellent entry point into long positions in the continuation of the uptrend. By the end of the day, the pair returned to the 1.3944 high, allowing another 50 pips to be taken.

Important fundamental statistics are not being released today for the UK, with the exception of a report on the balance of industrial orders from the Confederation of British Industrialists. However, it is unlikely that it will make any difference to traders of the British pound. For the bull market to continue, the bulls need a breakout of 1.3944, which they missed on Tuesday afternoon. Fixing on this range with a test from top to bottom forms an entry point to long positions in the continuation of the uptrend. Such a scenario will definitely bring GBP / USD to the area of ​​this week’s high at 1.4000, where I recommend taking profits. A breakout and consolidation above this range, with a test from top to bottom, will push the pound to a new major resistance in the area of ​​1.4062. In case of a decrease in the pound in the first half of the day: protection of the level of 1.3892 (by analogy with yesterday’s entry point) and the formation of a false breakout there form a signal to enter long positions in the expectation of renewed growth in the pair. In the scenario of no bulls’ activity and in the support area of ​​1.3892, it is best not to rush to buy: the best option would be to open long positions immediately on a rebound from a large local minimum of 1.3838, counting on an upward correction of 25-30 points within the day. The next big support is seen at 1.3792.

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To open short positions on GBP / USD you need:

As long as trading is held below resistance 1.3944, the pound will remain under pressure. The next formation of a false breakout in the first half of the day there forms an additional entry point into short positions against the trend, which will lead to a downward correction of the pair to the support area of ​​1.3892, from where it will be possible to observe the active actions of buyers. A breakout and consolidation below this range with a test from the bottom up will form a good signal to open new short positions in anticipation of a further fall in GBP / USD to a minimum of 1.3838, and a further target will be support at 1.3792, where I recommend taking profits. In the absence of activity on the part of sellers in the area of ​​resistance 1.3944, it is best not to rush to sell: in this case, I advise you to postpone short positions until the test of the weekly high of 1.4000, where only an unsuccessful consolidation and a return under this level form a convenient entry point to the market. I recommend selling GBP / USD immediately on a rebound from the new local maximum of 1.4062, counting on a downward correction of 25-30 points within the day.

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EUR / USD: plan for the European session on April 22. Commitment of Traders COT reports (analysis of yesterday’s deals). Traders are waiting for new benchmarks and results of the meeting of the European Central Bank

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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 proves a rather 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 problems 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-commercial positions 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.

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Indicator signals:

Moving averages

Trading is carried out in the area of ​​30 and 50 moving averages, which indicates trading in a sideways channel and the difficulty of determining the direction of the market in the short term.

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.

Bollinger Bands

The breakout of the upper border in the area of ​​1.3944 will lead to a new wave of growth in the pound. A breakout of the lower border in the area of ​​1.3910 will increase the pressure on the pair.

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.

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