GBP/USD: the plan for the American session on April 4 (analysis of morning deals). The pound remains in the channel, ignoring the speeches of representatives of the Bank of England

In my morning forecast, I paid attention to several levels, but I could not reach them. The lack of fundamental statistics and the speeches of representatives of the Bank of England did not affect the direction of the pair in any way, since it is not necessary to talk about any changes in the policy of the regulator yet. The general negative background that is present among buyers of risky assets also does not allow GBP/USD to return to weekly highs. Considering that it did not come to the test 1.3102 and 1.3142, no signals and entry points were also formed. From a technical point of view, nothing has changed for the second half of the day, nor has the strategy changed. And what were the entry points for the euro this morning?

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

Recently, the upward dynamics of the pound have been slowing down, and the inability to return to the upper boundary of the 1.3175 side channel, not to mention updating local highs, clearly indicates investors' pessimism about the pair's future direction. Statements by British politicians recently also do not help the pound, which indicates a fairly high probability of a further fall of the pair. It should be understood that only the protection of the 1.3102 support and a false breakdown at this level today in the afternoon will lead to the formation of the first buy signal capable of returning GBP/USD to the 1.3142 area. Weak data on changes in the volume of production orders in the US will help the bulls get to 1.3142, but it will be much more difficult to break above this range. Only the test of this area from top to bottom forms an additional entry point for opening long positions, which will strengthen the bulls and open up the prospect of growth in the area of the upper limit of 1.3173, where I recommend fixing the profits. The 1.3219 area will be a more distant target, but it will be quite difficult to get to this level in the current conditions. Under the scenario of the GBP/USD falling during the US session and the lack of activity at 1.3102, and most likely it will be so, it is best to postpone purchases to a larger level of 1.3071. I advise you to enter the market there only if there is a false breakdown. You can buy GBP/USD immediately on a rebound from 1.3038, or even lower - in the area of 1.3003 and only with the aim of correction of 30-35 points within a day.

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

Bears are not active today, but, as you can see on the chart, most likely, something will form at the level of 1.3102 in the near future, after which it will be possible to decide on entering the market. The more the pair is in the side channel, the higher the chances of a further decline in the downward trend seen since March 23 this year. At the moment, trading is below the moving averages, which indicates an increase in bearish pressure on the pair. The primary task of sellers remains to protect the 1.3142 range. The formation of a false breakout at this level will give an entry point into short positions. A more important target will be the 1.3102 level. Going beyond this range and a reverse test from the bottom to the top of 1.3102 will lead to the demolition of several buyers' stop orders, which will bring GBP/USD to the lows: 1.3071 and 1.3038. A more distant target will be the 1.3003 area, where I recommend fixing the profits. If the pair grows during the American session and sellers are weak at 1.3142, it is best to postpone sales to 1.3173. I also advise you to open short positions there only in case of a false breakdown. You can sell GBP/USD immediately for a rebound from the maximum of 1.3219, or even higher - from 1.3253, counting on the pair's rebound down by 30-35 points within a day.

The COT reports (Commitment of Traders) for March 22 recorded a sharp increase in short positions and only a slight strengthening of long ones. Several statements made by representatives of the Federal Reserve System last week returned pressure on the British pound, which is already experiencing quite serious problems with growth due to problems in the economy, which have already led to a decline in household living standards. Experts note that the situation will only worsen, as inflation risks, which mainly negatively affect the economy, are now quite difficult to assess. High energy prices and the geopolitical situation in Ukraine, together with several sanctions from the UK and other countries - all will slow down the economy. The softer position of the governor of the Bank of England this week has already led to another sell-off of the British pound, which is likely to continue due to the lack of good news. The only thing the bulls can count on now is the positive results of the negotiations between the representatives of Russia and Ukraine and progress towards a settlement of the conflict. The COT report for March 22 indicated that long non-commercial positions rose from the level of 32,442 to the level of 32,753, while short non-commercial positions jumped from the level of 61,503 to the level of 69,997. This led to an increase in the negative value of the non-commercial net position from -29,061 to -37,244. The weekly closing price increased from 1.3010 to 1.3169.

Signals of indicators:

Moving Averages

Trading is conducted below the 30 and 50 daily moving averages, which indicates a drop in the pair in the short term.

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

In case of a decline, the lower limit of the indicator around 1.3095 will act as support. In case of growth, the 1.3130 area will act as a resistance.

Description of indicators