GBP/USD: plan for the US session on August 18 (analysis of morning deals).

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

In my morning forecast, I paid attention to the support of 1.3729 and recommended that you make decisions on entering the market from it. Let's look at the 5-minute chart and talk about what happened. Weak data on inflation in the UK put pressure on the British pound, after which the pair fell to the support area of 1.3729, where I advised buying the pound. However, just a couple of points were missing before the false breakout was formed, and therefore I missed the entry point into long positions and the entire next upward correction after it. No other signals were formed, and the technical picture remained practically unchanged. The focus will be shifted to the Federal Reserve's monetary policy protocol, which is quite likely to help the pound recover after yesterday's fall since traders will not learn anything new about the central bank's plans from it. The initial task of the bulls remains to protect the July lows in the area of 1.3732. The formation of a false breakdown forms a signal to buy GBP/USD with the aim of an upward correction to the resistance of 1.3762, formed today during the European session. Just above 1.3762, there are moving averages that play on the sellers' side, limiting the pair's upward potential. A breakout and a test of 1.3762 from top to bottom form an additional signal to buy the pound already in the expectation of a return to 1.3793, where the bears will try to form the upper border of a new descending channel. Thus, buyers may have problems there as well. The longer-term goal remains a maximum of 1.3825, where I recommend fixing the profits. If the pressure on the pound returns and the bulls do not show anything in the support area of 1.3732 – the optimal scenario will be purchases from the new minimum of 1.3692, but only after forming a false breakdown. You can buy GBP/USD immediately for a rebound in the area of 1.3636 with the aim of an upward correction of 15-20 points within the day.

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

The initial task of the bears remains to protect the resistance of 1.3762, above which the moving averages pass, indicating the formation of a new downward trend. The optimal scenario for opening short positions will be the formation of a false breakdown at this level. Any nuances concerning changes in the monetary policy of the Federal Reserve System will force sellers to increase pressure on the pound. In this case, the target will be the first support level of 1.3732, below which it was not possible to break through today. A break in this area can return serious pressure on the pair. The test of 1.3732 from the bottom up forms an additional entry point into short positions and will push the GBP/USD even lower - to 1.3692, and there it is just a short distance away to the minimum of 1.3636, where I recommend fixing the profits. In the absence of active sellers around 1.3762, I advise you to postpone sales until the next major resistance at 1.3793, where the bears will try to build the upper border of the descending channel. I also recommend opening short positions only if a false breakdown is formed. You can sell GBP/USD immediately on a rebound from the local maximum in the area of 1.3825, counting on a downward correction of 25-30 points within the day.

The COT reports (Commitment of Traders) for August 10 recorded a reduction in short positions and a sharp increase in long ones. All this is explained by the results of the meeting of the Bank of England, where representatives again started talking that the attitude to monetary policy will change in the direction of tightening in the near future. Also, additional pressure on the pound was exerted by the report on inflation in the United States, which disappointed investors and coincided with economists' forecasts. It suggests that the Federal Reserve System will not rush to make changes in its monetary policy, especially against the appearance of another problem-disruptions with supply chains in the South Asian region. All this can seriously affect pricing and the economic recovery rates of several countries, including the UK. However, as before, I advise you to stick to the strategy of buying the pound with each significant decline, as the big players do. The COT report indicates that long non-commercial positions increased from 43,119 to the level of 44,750.

In contrast, short non-commercial positions decreased from the level of 43,205 to the level of 37,680, indicating continued purchases from major players. As a result, the non-commercial net position returned to the positive side and amounted to 7070, against -86 a week earlier. The closing price of last week fell from the level of 1.3891 to 1.3846.

Signals of indicators:

Moving averages

Trading is conducted below 30 and 50 daily averages, which indicates a further decline in the pound.

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 upper limit of the indicator in the area of 1.3762 will lead to a new wave of growth of the pound. A break of the lower limit of the indicator in the area of 1.3730 will lead to a fall of the pair.

Description of indicators