GBP/USD: plan for the US session on June 14 (analysis of morning trades).

To open long positions on GBP/USD, you need to:

In my morning forecast, I paid attention to the level of 1.4086 and recommended that you decide on entering the market from it. Let's look at the 5-minute chart and talk about what happened in the end. It is clear that from the first test, sellers achieve a breakdown of the level of 1.4086, after which it is updated from the bottom up, which forms a signal to open short positions in the continuation of the bear market. However, there is no downward movement, after which buyers regain control of this level and test it from top to bottom, forming a good entry point into long positions. At the time of writing, the upward movement was about 20 points. However, we did not reach the first target in the area of 1.2145.

In the afternoon, the technical picture did not change. The initial task of the bulls for the US session will be to protect the support of 1.4086, which they managed in the first half of the day. This level has a high value, as it acts as the lower border of a wide side channel, in which the pound is located for quite a long time. The next formation of a false breakout will be the first signal to open long positions with the expectation of restoring the pair to the resistance area of 1.4125. At this level, there are moving averages that play on the side of sellers. A breakout and consolidation above 1.4125 will open a direct path to the resistance of 1.4162 and then to the upper border of the side channel of 1.4196, where I recommend taking the profit. If the GBP/USD falls to 1.4086 and there is no activity of buyers, it is best to postpone long positions until the update of the minimum of 1.4041. I also recommend opening long positions immediately on the rebound from the level of 1.4008 to an upward correction of 20-25 points within the day.

To open short positions on GBP/USD, you need to:

As noted in the morning forecast, the market is waiting for the speech of the Governor of the Bank of England, Andrew Bailey. The pound sellers have the same task - a breakdown and consolidation below the support of 1.4086. A test of this level from the bottom up will indicate the formation of a real entry point into short positions, which will allow GBP/USD to get out of the side channel, in which the pair has been trading for about one month. In this scenario, the bears will target the support of 1.4041, and the further level will be the base of the 40th figure (1.4008), where I recommend taking the profit. However, the opportunity to reach these lows will appear only after the statements of the Governor of the Bank of England on the topic of maintaining monetary policy unchanged for a long period.

There are no other reasons for such an active fall in the pound yet. In the event of a rise in GBP/USD in the second half of the day, the bears will need to think carefully about protecting the resistance of 1.4125, above which the moving averages are playing on their side. The formation of a false breakout forms a signal to open short positions for further downward correction of the pair. In the scenario of GBP/USD growth during the US session and the lack of activity on the part of sellers at the level of 1.4125, I advise you to postpone short positions until the resistance test of 1.4162 or even higher - until the upper limit of the side channel of 1.4196 is updated, where you can sell the pound immediately for a rebound, counting on a downward correction of 20-25 points within the day.

Let me remind you that the COT reports (Commitment of Traders) for June 1 recorded a minimal increase in long positions and a very large increase in short positions, which was proof of a sharp drop in the pound. Statements from the Bank of England representatives no longer work, as market participants need concrete actions, not promises. It will be very difficult for the bulls to break through to new local highs. The risk of a later opening of the UK economy due to the spread of the Indian strain of coronavirus also creates several obstacles for buyers of the pound. However, as soon as the Central Bank begins to take inflation seriously and talk about changes in the volume of the asset purchase program, the demand for GBP/USD will immediately return. Therefore, the best scenario is to buy at every good decline in the British pound against the US dollar. The COT report indicates that long non-commercial positions rose from the level of 64,193 to the level of 64,204. However, short non-commercial positions rose much stronger from the level of 33,534 to 40,079, which indicates the emergence of new sellers in the market after the pair reached another local high. As a result, the non-profit net position decreased from 30,659 to the level of 24,125. Last week's closing price changed to 1.42270 against 1.41553.

Signals of indicators:

Moving averages

Trading is below 30 and 50 daily averages, which indicates that the pressure on the pound remains.

Note: The period and prices of the 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

A break of the upper limit of the indicator in the area of 1.4106 will lead to a new wave of growth of the pound. A break of the lower limit of the indicator in the area of 1.4086 will increase the pressure on the pair.

Description of indicators