In my morning forecast, I paid attention to the 1.1192 level and recommended deciding on entering the market there. Let's look at the 5-minute chart and figure out what happened. A decline and a false breakdown in this range led to a buy signal, but it has not yet reached strong growth. No people are willing to sell at the lows, but there are also no those willing to bet on further strengthening the British pound. In the afternoon, the technical picture was completely revised.
To open long positions on GBP/USD, you need the following:
For the bulls to regain control of the market, it is necessary to get above the resistance of 1.1235, formed at the end of the first half of the day and where the moving averages playing on the side of the bears are. At this level, the bulls will focus their attention, especially after the release of a number of fundamental statistics on the United States. Data on the weekly number of initial applications for unemployment benefits and data on sales in the secondary housing market may disappoint traders, thereby putting pressure on the US dollar. We will unlikely hear anything new in the interviews of FOMC members Harker and Bowman. Thus, we can ignore the speeches of these politicians. In the case of a decline in the pair after strong statistics, only the formation of a false breakdown in the area of the new support of 1.1164, by analogy with what I discussed above, will allow you to enter long positions in the expectation of continuing to build a bull market. The target of the movement will be the 1.1235 area – a new resistance, tested several times today in the morning, where the moving averages are already playing on the bears' side. A breakout and a top-down test of 1.1235 will create a direct road to the 1.1294 area, strengthening the bull market. Going beyond this level will allow you to test 1.1355, where I recommend fixing profits. In the scenario of a fall in GBP/USD against the background of strong statistics and hawkish comments from FOMC members, as well as the absence of buyers at 1.1164, the pressure on the pound will increase. In this case, I recommend postponing long positions to 1.101. I advise you to buy there only on a false breakdown. It is possible to open long positions on GBP/USD immediately for a rebound from 1.1059, or around the minimum of 1.1019, with the aim of a correction of 30–35 points within a day.
To open short positions on GBP/USD, you need the following:
Bears have done everything possible to strengthen control over the market, but they have not managed to catch on to weekly lows. Now the main task will be to protect the nearest resistance, 1.1235, which they need to throw all their strength at. In the event of weak data on the real estate market in the United States, which most likely will happen, the optimal scenario for sale will be a false breakdown in the resistance area of 1.1235. This will strengthen the upper boundary of the new descending channel, and the target, in this case, will be the nearest support of 1.1164. Only a breakout and a reverse test from the bottom up of this range will give a good entry point, with the pair continuing to fall and reaching a minimum of 1.101, for which buyers will again begin to fight actively. The farthest target will be the 1.1059 area, where I recommend fixing profits. With the option of GBP/USD growth and the absence of bears at 1.1235 during the American session, bulls will continue to return to the market in the hope of leveling the situation and updating monthly highs. This should push the pair to the 1.1294 area. Only a false breakout at this level will give an entry point into short positions with the aim of a new downward movement. In case of lack of activity, I advise you to sell GBP/USD immediately for a rebound from 1.1355, counting the pair's rebound down by 30-35 points within a day.
Signals of indicators:
Moving Averages
Trading is below the 30 and 50-day moving averages, indicating a pressure return on 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
In the case of growth, the upper limit of the indicator at around 1.1235 will act as resistance.
Description of indicators
Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow.Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green.MACD indicator (Moving Average Convergence / Divergence - moving average convergence/divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9Bollinger Bands (Bollinger Bands). Period 20Non-profit speculative traders, such as individual traders, hedge funds, and large institutions, use the futures market for speculative purposes and to meet certain requirements.Long non-commercial positions represent the total long open position of non-commercial traders.Short non-commercial positions represent the total short open position of non-commercial traders.Total non-commercial net position is the difference between the short and long positions of non-commercial traders.