FX.co ★ GBP/USD: plan for the European session on November 9. Commitment of Traders reports (analysis of yesterday's trades)

To open long positions on GBPUSD, you need:

In the afternoon, sellers of the pound tried to regain control of the market and it seemed that they succeeded, however, this did not lead to a larger drop in the GBP/USD. Let's look at the 5-minute chart and talk about where you can and should have sold the pound. A breakout and consolidation below the support of 1.3154, where I recommended selling the pound, occurred in the middle of the European session. It was the test of this level from the bottom up that led to a good entry point into short positions, which worked itself out twice. Each time, the downward movement was more than 30 points. But, as we can see, now the bulls have regained control of the market. This happened during a speech by Bank of England Governor Andrew Bailey.

As long as trading is conducted above the level of 1.3154, you can expect the pound to continue growing in the short term. A top-down test of the 1.3154 area and the formation of a false breakout on it will be an additional signal to open long positions to restore the GBP/USD to the area of the 1.3234 maximum, where I recommend fixing the profits. A longer-term target will be a maximum of 1.3315, however, this scenario will be implemented in the event of good news on Brexit. If the pair returns to the 1.3154 level again in the second half of the day, it is best to postpone long positions until the 1.3093 minimum is updated or buy GBP/USD immediately for a rebound from the 1.3034 support in the expectation of a correction of 20-30 points within the day.

To open short positions on GBPUSD, you need to:

Sellers again need to regain the level of 1.3154, as only another consolidation under it will increase pressure on the pair and lead to the resumption of the bear market. The initial goal will be to test the level of 1.3093, which we did not reach in the first half of the day. However, it will be possible to talk about resuming the downward correction only after updating the intermediate support at 1.3034. The key target for sellers at the beginning of this week will be the area of 1.2967, where I recommend fixing the profits. In the scenario of further growth of GBP/USD in the second half of the day, and the bulls have already regained control of the market after the speech of Andrew Bailey, it is best to wait for the test of the maximum of 1.3234, where the formation of a false breakout will be a signal to open short positions. I recommend selling the pound immediately for a rebound only from the resistance of 1.3315, based on a correction of 20-30 points within the day.

Let me remind you that in the COT reports (Commitment of Traders) for November 3, there was a reduction in long positions and a slight increase in short ones. Long non-commercial positions fell from 31,799 to 27,701. At the same time, short non-commercial positions rose just slightly to 38,928 from 38,459. As a result, the negative non-commercial net position was -11,227 against -6,660 a week earlier, which indicates that the sellers of the British pound retain control and their minimal advantage in the current situation.

Signals of indicators:

Moving averages

Trading is conducted in the area of 30 and 50 moving averages, which indicates the equality of buyers and sellers.

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 classic daily moving averages on the daily chart D1.

Bollinger Bands

A break of the upper limit in the area of 1.3185 will lead to a new wave of growth of the pound. A break in the lower limit of the indicator around 1.3120 will increase the pressure on the pound.

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 9
• Bollinger Bands (Bollinger Bands). Period 20
• Non-profit speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and 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.