To open long positions on GBP / USD you need:
In my morning forecast, I paid attention to the level 1.3944 and recommended making a decision based on it. Let’s take a look at the 5 minute chart and understand the entry points. By analogy with yesterday, the bears again achieved the formation of a false breakout at 1.3944, which led to a good entry point into short positions. As a result, there was a movement down to the target level 1.3892, where I recommended taking profits. The profit was about 50 points. Then, from the level of 1.3892, one could observe the formation of a signal to open long positions, all according to the same scheme with a false breakout. As a result: the upward movement was 25 points, and then the bears brought the market back under their control, having achieved a breakdown of 1.3892.
In the afternoon, buyers need to focus on the 1.3892 level, as their primary goal will be to get the pair back and close the day above this range. Only this will be able to stop the bear market that we have been observing since the middle of the week. The downward test of the level 1.3892 will lead to the formation of a signal to buy 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. In the event of a further decline in the pair, it is best to postpone purchases until the test of a larger low of 1.3838, from which you can open long positions immediately on a rebound, counting on an upward correction of the pair by 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, which ultimately dumped GBP / USD into the support area of 1.3892. After some time, a breakdown of this level also took place. The main challenge for the bears in the afternoon is now to maintain control over this range. A test of this area from the bottom up will lead to the formation of a new signal to open short positions with the expectation of a decrease in 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. If the scenario of the growth of the pound during the American session above the resistance of 1.3892, it is best not to rush to sell: you can open short positions only on a rebound from the level of 1.3944, 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 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-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.
If the pair grows, the upper border of the indicator in the area of 1.3945 will act as a resistance.
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.