To open long positions on GBP / USD you need:
In my morning forecast, I paid attention to the level 1.3944 and recommended making decisions based on it. Let’s take a look at the 5 minute chart and understand the entry points. 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 profit was about 50 points.
In the second half of the day, buyers need to focus on the support at 1.3892, since only the formation of a false breakout there will lead to a signal to open long positions in the hope of renewed growth of the pound. In such a scenario, one can expect GBP / USD to recover to the morning highs of 1.3944, where I recommend taking profits. Today there are no fundamental reasons that could lead to a reversal of the intraday downward trend of the pair. Therefore, in the absence of bulls’ activity in the support area of 1.3892, it is best to postpone purchases until the test of a larger low at 1.3838, from which one can open long positions immediately on a rebound, counting on an upward correction of the pair of 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 1.3944, albeit not so quickly, but eventually dumping GBP / USD into the support area of 1.3892. The main task of the bears in the second half of the day will be to return the pair to the level of 1.3892, however, only consolidation below and the test of this area from the bottom up will lead to the formation of a new signal to open short positions in the hope of reducing the pound to a large minimum of 1.3838, where I recommend taking profits. A breakout of this range will completely cancel out the bull market seen earlier this week. In the scenario of the growth of the pound during the American session, it is best not to rush to sell: a test of resistance at 1.3944 and another false breakdown 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 this month’s high is renewed in the 1.4000 region, from where you can sell the pound immediately on a rebound, counting on a downward correction of 25-30 points within the day.
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 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 earlier 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.
Trading is carried out below the 30 and 50 daily averages, which indicates that the pressure on the pair remains.
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.
A breakout of the upper border of the indicator in the area of 1.3944 will lead to a larger increase in the pound.
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 the short and long positions of non-commercial traders.