GBP/USD: plan for the European session on April 15. COT reports. Pound bulls have been pretty battered, but there is still a chance

Yesterday, several excellent signals were formed to enter the market, which made it possible to earn good money. Let's look at the 5-minute chart and figure out the entry points. The low volatility of about 25 points in the first half of the day confirmed the theory that no one is interested in the British pound at current highs. In my morning forecast, I paid attention to the level of 1.3113 and advised you to make decisions on entering the market. The pair's decline to this range took place in the first half of the day, but I could not wait for a false breakout to form at this level. During the US session, a breakthrough of the 1.3113 level took place without a reverse test, so I did not have time to sell the pound. Only a breakthrough and consolidation below 1.3089 provided a signal to open short positions. As a result, the pair sank by 50 points and rested on the support of 1.3036. A false breakout there led to a buy signal – the growth was about 30 points.

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

The lack of those willing to buy at the highs resulted in a major sell-off of the pound, especially after it became clear: strong data on retail sales in the United States, which surprisingly did not decrease due to high inflation, as well as the growth of the consumer confidence indicator to a new high – all this will allow the American economy, if not to avoid a recession, then definitely postpone it. But if you look at the technical picture, even yesterday's fall in the pound is not yet a verdict for bulls. The primary task for today is to protect the 1.3057 support formed by yesterday's results. Of course, counting on instant long positions from this level will not be entirely correct, so I advise you to open longs there only after a false breakout. Given that there are no important statistics for the UK today, the bulls may not force events and postpone entering the market to a larger support of 1.3034, which yesterday managed to restrain the onslaught of bears on the pound. But forming a false breakout there will provide a signal to buy the pound. In case the bulls are not active there, the optimal scenario will be long positions for a rebound from 1.3008, or from this month's low – 1.2974, based on an upward correction of 25-30 points within the day. An equally important task for today is growth and consolidation above the resistance of 1.3081. Only a breakthrough and a reverse test of this level from top to bottom can provide a buy signal based on the pound's recovery to the area of 1.3101, where the moving averages are playing on the bears' side. This will be enough to maintain the upward potential of the pair at the end of the week. A breakthrough of 1.3101 will open a direct road to 1.3122 and 1.3143, where I recommend taking profits.

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

The bears failed the pound quite significantly, and they failed to completely cancel out the growth that was observed the day before. It is best to take your time with short positions today. I advise you to wait for the growth and a false breakout to form in the area of the nearest resistance level of 1.3081. A false breakout is necessary to understand whether there are any bears at this level or not, and also whether the major players will continue to fight for yesterday's trend, or prefer to leave the pair alone at the end of the week. While maintaining the pressure on the pound, the bears will need to try very hard to achieve a breakdown of the 1.3057 support. This level is not as important for them as 1.3034, but a breakthrough and a reverse test from the bottom up of 1.3057 will provide a signal to open short positions in continuation of yesterday's downward correction and with an exit at 1.3034. A breakdown of this range will also lead to forming another sell signal that can return the pound to the lows: 1.3008 and 1.2974, where I recommend taking profits. In case GBP/USD grows and bears are not active around 1.3081, bulls may try to pull the market to their side. Therefore, I advise you to postpone short positions to a larger resistance of 1.3101, below which the moving averages pass. I also advise you to open short positions there only in case of a false breakout. It is possible to sell GBP/USD immediately for a rebound from the high of 1.3122, counting on the pair's rebound down by 30-35 points within the day.

I recommend for review:

The Commitment of Traders (COT) report for April 5 logged an increase in both short and long positions. However, there were more of the first ones, which once again led to an increase in the negative delta. Fears related to the state of the UK economy and the risks of high inflation, which is sure to further exacerbate the ongoing crisis of British households, have been confirmed. Recent GDP data indicated a very sharp slowdown in economic growth. Experts note that the situation will only worsen, as inflation risks are now quite difficult to assess, but it is clear for sure that the consumer price index will continue to grow in the coming months. At the same time, the soft position of the governor of the Bank of England will only push prices up. 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. Do not forget about the aggressive policy of the Federal Reserve, which is becoming more hawkish every day. In the US, there are no such problems with the economy as in the UK, so there the Fed can raise rates more actively, which it is going to do during the May meeting – another signal towards selling the pound against the US dollar. The COT report for April 5 indicated that long non-commercial positions rose from the level of 30,624 to the level of 35,873, while short non-commercial positions jumped from the level of 70,694 to the level of 77,631. This led to an increase in the negative value of the non-commercial net position from -40,070 to -41,758. The weekly closing price rose to 1.3112 against 1.3099.

Indicator signals:

Trading is conducted in below 30 and 50 moving averages, which indicates a difficult situation in the market.

Moving averages

Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart.

Bollinger Bands

In case of growth, the upper limit of the indicator around 1.3101 will act as resistance. In case the pound falls, the lower limit of the indicator in the area of 1.3034 will provide support.

Description of indicators