GBP/USD: plan for the American session on December 29 (analysis of morning deals).

To open long positions on GBPUSD, you need to:

In the first half of the day, no signals were formed to enter the market, as the price did not reach any of the levels I indicated. From a technical point of view, nothing has changed, so the focus will be on the resistance indicated in the morning at 1.3530, as the pair is close to it.

The task of buyers in the second half of the day is to maintain control over the level of 1.3433. The formation of a false breakout will be a signal to open long positions in the continuation of the pound's recovery in the short term to the resistance of 1.3530. The main goal will be its breakthrough and consolidation. The test of this level from top to bottom forms an additional entry point into long positions to reach the maximum of 1.3615, from which the main fall of the pair occurred yesterday. The longer-term target remains the resistances of 1.3690 and 1.3750, however, they will only be available if excessive volatility appears against the background of low trading volume on New Year's Eve. In a scenario of a falling pound and the lack of activity of the bulls near the support at 1.3433, it is best not to rush with purchases, but wait for the updates low of 1.3308, from which you can buy GBP/USD immediately on a rebound in the calculation of a correction of 30-40 points intraday.

To open short positions on GBPUSD, you need to:

The formation of a false breakout in the resistance area of 1.3530, which the pair has come close to, will return pressure on GBP/USD and lead to a continuation of the decline with a support test of 1.3433. A real break of this level with its update from the bottom up forms a good signal to open short positions in GBP/USD. In this scenario, the target will be the lows of 1.3308 and 1.3193, on which the further bear market will depend. Do not rule out high volatility at the end of the year, especially against the background of the low trading volume. If the bulls manage to recapture the level of 1.3530 today in the afternoon, it is better to take your time with short positions. The optimal scenario for selling the pound will be an unsuccessful consolidation above 1.3615. I recommend opening short positions immediately on the rebound from the maximum in the area of 1.3690 with the aim of a downward correction of 30-35 points within the day.

Let me remind you that the COT reports (Commitment of Traders) for December 21 recorded an increase in interest in the British pound among both buyers and sellers. Long non-commercial positions increased from 35,128 to 37,550. At the same time, short non-commercial remained practically unchanged and increased only from 31,060 to 31,518. As a result, the non-commercial net position remained positive and grew to 6,032 against 4,068 a week earlier. All this suggests that traders continue to bet on the strengthening of the pound even in the face of a new strain of COVID-19, which was first recorded in the UK. Everyone believes in the vaccine and that the beginning of next year, once the quarantine measures are lifted, will be associated with strong economic growth, which will give the market a new bullish momentum and lead to the pound updating new annual highs. Additional stimulus by the Bank of England may somewhat smooth the upward trend in the pound.

Signals of indicators:

Moving averages

Trading is conducted below 30 and 50 daily averages, which indicates the sideways nature of the market.

Note: The period and prices of moving averages are considered by the author on the hourly chart H1 and differ from the general definition of the classic daily moving averages on the daily chart D1.

Bollinger Bands

If the pair grows, the upper limit of the indicator around 1.3507 will act as a resistance. A break of the lower limit of the indicator in the area of 1.3435 will increase the pressure on the pair.

Description of indicators