GBP/USD: trading plan for the US session on April 19th (analysis of morning deals). The pound is trying to regain its advantage

In my morning forecast, I focused on the level of 1.2437 and planned to make decisions based on it for market entry. Let's look at the 5-minute chart and analyze what happened there. The breakout and subsequent retest of this range from top to bottom led to a buy signal, resulting in the pair rising by only 15 points, after which everything ended. In the second half of the day, the technical picture remained unchanged.

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

Data on retail sales, which turned out to be worse than economists' forecasts, did not particularly affect the British pound in the first half of the day. Considering that there are no significant statistics during the American session, it is unlikely to expect a strong continuation of the pair's upward correction. A lot will depend on the behavior of traders at the level of 1.2437, where, analogous to the first half of the day, the formation of a false breakout will provide an entry point for buying to rise to resistance at 1.2482, which we still haven't reached. A breakout and retest of this range from top to bottom will strengthen the chance of a GBP/USD recovery, leading to new purchases and allowing us to reach 1.2532. If there is a breakout above this range, we can discuss a surge to 1.2575, where I plan to profit. In the scenario of a GBP/USD decline and the absence of buyers at 1.2437 in the second half of the day, sellers will have a chance for a larger decline in the pair's trend. In this case, I will look for purchases around 1.2389. Forming a false breakout will be a suitable option for market entry. I plan to open long positions on GBP/USD immediately on the rebound from 1.2340, with a correction target of 30-35 points within the day.

To open short positions on GBP/USD, the following is required:

The chances of the pound falling remain. But before that, I would like to see how sellers behave at the nearest resistance level of 1.2482, where a false breakout will provide a suitable entry point for selling in an attempt to push down the middle of the sideways channel at 1.2437, which was successfully missed in the first half of the day. A breakout and retest from bottom to top of 1.2437 will pressure the pair, giving bears an advantage and another entry point for selling to update to 1.2389. The ultimate target will be a minimum of 1.2340, where I will take a profit. In the scenario of GBP/USD rising and the absence of bears at 1.2482 in the second half of the day, which is unlikely, bulls will have an opportunity to build a fairly good correction at the end of the week with an upward movement to the resistance area at 1.2532. I will also consider short positions there only on a false breakout. If there is no activity, I suggest opening short positions on GBP/USD from 1.2575, expecting the pair to rebound downwards by 30-35 points within the day.

The COT report (Commitment of Traders) for April 9 showed a sharp reduction in long and short positions. Pound buyers left the market faster than sellers, and there are objective reasons for this: the first and main reason is high inflationary pressure in the United States, which will maintain demand for the dollar, exerting serious pressure on risky assets, including the British pound. The second reason is the soft policy of the Bank of England, which has yet to go anywhere. New statements by regulator representatives may negatively affect the bullish prospects of the pound – especially after the clear position of the ECB last week, which consisted of rate cuts in the eurozone as early as this summer. In addition to all this, there is a need to maintain a tough stance from the Federal Reserve, and it is unlikely that we can expect a strong bullish market in the GBP/USD pair. The latest COT report states that long non-commercial positions decreased by 18,352 to 80,000, while short non-commercial positions decreased by 3,190 to 51,748. As a result, the spread between long and short positions increased by 1,704.

Indicator signals:

Moving averages:

Trading is carried out around the 30 and 50-day moving averages, indicating a sideways market.

Note: The author considers the period and prices of moving averages on the H1 hourly chart, which differs from the general definition of classical daily moving averages on the D1 daily chart.

Bollinger Bands:

In cases of decline, the lower boundary of the indicator will act as support around 1.2390.

Description of the indicators:

• Moving average (MA): Determines the current trend by smoothing volatility and noise. Period 50. Marked on the chart in yellow.

• Moving average (MA): Determines the current trend by smoothing volatility and noise. Period 30. Marked on the chart in green.

• MACD indicator (Moving Average Convergence/Divergence): Fast EMA period 12. Slow EMA period 26. SMA period 9.

• Bollinger Bands: Period 20.

• Non-commercial traders: Speculators such as individual traders, hedge funds, and large institutions using the futures market for speculative purposes and meeting specific 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.

• The total non-commercial net position is the difference between non-commercial traders' short and long positions.