GBP/USD: plan for the US session on August 9 (analysis of morning deals).

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

The bears tried to keep the pressure on the British pound as best they could. However, the obvious response of the buyers did not take long to wait. Let's look at the 5-minute chart and talk about what signals were formed today. A short-term bear market led to the formation of a false breakdown in the resistance area of 1.3878, and the test of this level from the bottom up was a confirmation of an excellent entry point into short positions. As a result, the downward movement was about 25 points. However, we did not reach the intended target in the area of 1.3846, after which the market actively turned around, and the bulls again began to storm the resistance of 1.3878. For the second half of the day, the technical picture has completely changed. Now the focus is shifted to the speeches of the Federal Reserve System representatives, who may slightly change their views on what is happening in the economy. However, it is unlikely that any of them will focus on the need to curtail support measures in the near future, which may continue to keep the market on the side of buyers who are aiming for the resistance of 1.3904, just below which the moving averages are playing on the side of bears. A breakdown and a reverse test of this level from top to bottom form an entry point into long positions with the aim of an upward correction and a return to the maximum of last week in the area of 1.3944. A breakout of this level will also lead to an update of new local resistances of 1.3978 and 1.4059, where I recommend fixing the profits. In the scenario of a repeated decline of the pair during the American session, the bulls need to try to protect the new support of 1.3854, which was formed in the first half of the day. I recommend opening long positions from this level only if a false breakdown is formed. If there is no activity of buyers, the best solution is to take long positions immediately to rebound from the larger support of 1.3807. The next major low is around 1.3768, from where you can also buy EUR/USD with the aim of an upward correction of 20-25 points within the day.

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

The initial task of the bears is now to protect the resistance of 1.3904, which in some way acts as the middle boundary of the new side channel. Its sellers still can't break it. A lot will depend on the reaction to the statements made by representatives of the Federal Reserve System. If we touch on the topic of curtailing support measures after Friday's reports on the labor market, then most likely, the pressure on the pound will increase. Forming a false breakdown at 1.3904 will return the pair to a downward trend, which will form the first signal to open short positions in the expectation of a decline in GBP/USD to the minimum of today in the area 1.3854. A breakdown of this level with a reverse test from the bottom up will push GBP/USD to a new area of 1.3807, where I recommend fixing the profits. The longer-range target remains the 1.3768. In the absence of active actions of sellers in the area of 1.3904, I advise you to postpone sales until the next major resistance of 1.3944, which acts as the maximum of last week. I also recommend opening short positions only if a false breakdown is formed. You can sell GBP/USD immediately on a rebound from a new local maximum in the area of 1.3978, counting on a downward correction of 25-30 points within the day.

The COT reports (Commitment of Traders) for July 27 recorded a reduction in long positions. However, sellers also did not insist and partially reduced their volume of positions. The growth of the pound throughout the week allowed the GBPUSD pair to return to monthly highs. However, it was not possible to gain a foothold higher. The panic after lifting all quarantine restrictions in the UK has receded, and now the main focus this week will be placed at the meeting of the Bank of England on monetary policy. The European Central Bank and the Federal Reserve System did not change anything. Most likely, the Bank of England will also do the same. Before abandoning the stimulus measures, the Bank of England committee members will surely wait for accurate data on how things are going on in the labor market. It is expected that a large-scale government program to support the labor market will be completed as early as September of this year. It may force the regulator to take a longer wait-and-see position since the central bank is not experiencing any special problems with inflationary pressure yet. If the Bank of England representatives start talking more about plans to reduce the bond purchase program, this will provide significant support to the pound. I advise you to stick to the strategy of buying a pair with each significant decrease in it, as the big players do. The COT report indicates that long non-commercial positions decreased from 44,223 to the level of 41,194.

In contrast, short non-commercial positions decreased from the level of 47,720 to the level of 46,878, indicating a cautious approach to sales at current highs. As a result, the non-commercial net position remained negative and amounted to -5,684 against -3,496 a week earlier. The closing price of last week jumped from the level of 1.3668 to 1.3826.

Signals of indicators:

Moving averages

Trading is conducted below 30 and 50 daily averages, which indicates the preservation of a small pressure on the pound, which buyers still can not get rid of.

Note: The author considers the period and prices of moving averages 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 lower limit of the indicator in the area of 1.3854 will lead to a fall in the pound. A break of the upper limit of the indicator in the area of 1.3885 will lead to a new wave of growth of the pair.

Description of indicators