GBP/USD: the plan for the American session on November 9 (analysis of morning deals). A great signal to sell the pound

To open long positions on GBP/USD, it is required:

In my morning forecast, I paid attention to the level of 1.3596 and recommended making decisions on entering the market. As a result of unsuccessful actions of buyers above 1.3596 and a false breakdown, a signal was formed to sell the pound, the probability of which I described in detail in the morning. At the time of writing, the drop down was about 40 points and the bears aimed at updating the support of 1.3533. From a technical point of view, nothing much has changed, so you can take the morning review as a strategy.

Today, another speech by the governor of the Bank of England, Andrew Bailey, is expected, which may further spoil the plans of buyers of the pound for further growth of the pair. Given that important fundamental statistics on the US economy are not coming out in the afternoon, most likely, the bulls will try to regain control of the market and re-update the resistance at 1.3596. The further growth of the pair depends on this level. To maintain control over the market, buyers of the pound need to take it under their control as soon as possible, which they failed to do in the first half of the day. Only a breakout and a reverse test of this range from top to bottom will form a buy signal for GBP/USD, which will continue the upward trend and push the pair even higher - to the maximum area of 1.3648. A test of this area will be evidence of the beginning of a good bullish trend, but for greater confidence, you need to consolidate higher. A breakdown of 1.3648 will open a direct path to new highs: 1.3694 and 1.3754, where I recommend taking the profits. If in the afternoon we will continue to observe the pressure on the pair, I advise you not to rush with purchases. An important task of the bulls remains to protect the support of 1.3533, in the area in which the moving averages are playing on the side of buyers. Only the formation of a false breakdown there forms a good entry point into purchases. Otherwise, the optimal scenario for opening long positions will be a support test of 1.3478 - it is also best to wait for the formation of a false breakdown there. I advise you to look at long positions of GBP/USD immediately for a rebound only from the minimum of 1.3426, based on an upward correction of 25-30 points within a day.

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

The bears "perfectly" coped with the morning tasks and formed a good entry point into short positions, which is still being implemented at the time of writing the review. The speech of the representative of the Bank of England, Andrew Bailey, may put even more pressure on the pair, so sellers can count on a decline in the pound to the support area of 1.3533. A breakout and a reverse test of this range from the bottom up will form a signal to open new short positions already in the expectation of reducing the pair to a minimum of 1.3478, and then to update the support of 1.3426, where I recommend fixing the profits. If the pound grows in the first half, the bears will still show themselves only after the next resistance test of 1.3596. Only the formation of a false breakdown there, by analogy with what I discussed above, will be a good signal to sell the pound in the afternoon. In the absence of sellers' activity at 1.3596, I advise you to postpone sales until the next resistance of 1.3648. However, it is best to wait for an unsuccessful attempt to consolidate higher. I advise you to open short positions on the pound immediately for a rebound from the maximum of 1.3694, or even higher - around 1.3754, counting on the pair's rebound down by 20-25 points inside the day.

The COT reports (Commitment of Traders) for November 2 recorded an increase in both short and long positions, which reflected the return of demand for the British pound before the meeting of the Bank of England, which took place last week. Given that there were more buyers, and they continue to return to the market, we can count on the continuation of the upward correction of the pair. This week, many representatives of the Bank of England are speaking, who are already beginning to make statements to the contrary, disagreeing with the policy of Governor Andrew Bailey. Let me remind you that after the November meeting of the Bank of England, monetary policy remained completely unchanged, although many traders bet on its tightening by the end of the year. In this regard, sharp inflationary pressure will continue to support demand for the British pound. Therefore, I recommend sticking to the strategy of buying the pair in case of very large falls, which will occur against the background of uncertainty in the policy of the Central Bank. The COT report indicates that long non-commercial positions increased from the level of 51,912 to the level of 57,255, while short non-commercial positions also strengthened slightly - from the level of 36,959 to the level of 42,208. This led to a change in the non-commercial net position towards growth. The delta was 15,047 against 14,953 a week earlier. The weekly closing price of GBP/USD has significantly collapsed as a result of the policy of the Bank of England: from 1.3763 to 1.3654.

Signals of indicators:

Moving averages

Trading is conducted above 30 and 50 daily moving averages, which indicates the formation of an upward correction for the pair.

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

A breakthrough of the upper limit of the indicator in the area of 1.3590 will lead to a new wave of growth of the pound. A break of the lower limit in the area of 1.3540 will increase the pressure on the pair.

Description of indicators