To open long positions on GBP / USD you need:
In my morning forecast, I paid attention to the 1.4000 level and recommended making decisions based on it. The 5-minute chart clearly shows how, after several unsuccessful attempts to catch on to the resistance of 1.4000, the bulls retreated from the market, giving control to sellers. A false breakdown of the 1.4000 level led to the formation of a good entry point for short positions, which ultimately pushed the pair to the target level 1.3944, to which we just fell short of a couple of points. Of course, it was quite difficult to sit out all the downward movement after yesterday’s bull market, but whoever managed could easily take away about 50 points of profit. I took only 27.
The data on the UK labor market did not provide significant support to the pound, although it turned out to be much better than the forecasts of economists. The reports once again prove that the economy is recovering this spring, which will push the pound up in the medium term. As for today’s afternoon, I recommend opening long positions only after a false breakout is formed in the support area of 1.3944, which will be the first excellent entry point into the continuation of the bull market observed yesterday. In the scenario of the absence of bulls’ activity in the support area at 1.3944, 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 at 1.3892, slightly above which there are moving averages playing on the side of buyers. In this case, you can count on a rapid growth of about 25-30 points within the day.
To open short positions on GBP / USD you need:
The sellers got their way and managed to protect the resistance at 1.4000. The main task of the bears in the second half of the day will be to return the pair to the level of 1.3944, which they came close to reaching during the European session. Only the consolidation below and the test of 1.3944 from the bottom up will lead to the formation of a signal to open short positions with the expectation of a return to support 1.3892, where I recommend taking profits. An equally important target for sellers will also be the breakout of this range, which, thanks to the stop orders of the bulls, which are located a little lower, will quickly push GBP / USD to a low of 1.3838. A decline to this level will completely cancel out yesterday’s bullish momentum. In the scenario of the growth of the pound during the American session, it is best not to rush to sell. Resistance 1.4000 and another false breakout at this level will be good guidance for sellers to open short positions. In the absence of bears’ activity there, it is best to postpone short positions until new monthly highs are renewed in the 1.4062 and 1.4115 areas, from where you can sell the pound immediately on a rebound, counting on a downward correction of 25-30 points within the day.
EUR / USD: plan for the American session on April 20 (analysis of morning deals). Buyers failed to defend support at 1.2047
I recommend that you familiarize yourself with my video forecast for today.
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 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-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 area of 30 and 50 day averages, which jeopardizes the uptrend.
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.
In case of growth, the upper border of the indicator in the area of 1.4005 will act as a resistance. A breakout of the lower border at 1.3957 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.