FX.co ★ GBP/USD: plan for the American session on December 14 (analysis of morning deals)

To open long positions on GBPUSD, you need:

In the first half of the day, quite a lot of profitable signals were formed to enter the market. The sharp recovery of the British pound was due to the growth of expectations for a positive conclusion of negotiations on the Brexit trade agreement. If you look at the 5-minute chart, you will see how the bulls achieved a breakdown of the level of 1.3340, after which they returned to this range from the bottom up, which formed a good signal to open long positions. After that, there was an instant growth to the maximum of 1.3388, where the first profit-taking and a downward correction of 25 points were observed. Repeated testing of this level led to a breakdown, after which a buy signal was formed, exactly like the first transaction. The pair's growth by another 50 points led to an update to the maximum of 1.3437, where I recommended selling the pound immediately for a rebound, which happened. At the first test of 1.3437, a downward correction of about 25 points took place.

At the moment, the bulls are focused on protecting the support of 1.3388 and their initial task is to maintain control over this level. Only the formation of a false breakout there in the second half of the day will lead to the continued growth of the pound. An equally important goal for buyers is a breakout and consolidation above the resistance of 1.3437, where the stop orders of speculative sellers are located. A top-down test of this level forms an excellent entry point for long positions. In this case, we can expect further strong bullish momentum in the area of 1.3489 and a return to a maximum of 1.3534, where I recommend fixing the profits. However, only good news on the Brexit trade agreement will open the way to this range. No important fundamental statistics are expected this afternoon, so trading may continue near the daily highs. If the pair declines and there is no activity in the area of 1.3388, it is best to postpone long positions until the minimum of 1.3340 is updated, from where you can buy the pound immediately for a rebound in the expectation of a correction of 25-30 points within the day.

To open short positions on GBPUSD, you need to:

Bears should focus on defending the resistance of 1.3437, which they managed to do in the first half of the day. The next formation of a false breakout will be a signal to sell the pound in the second half of the day. In this case, the main goal will be a breakthrough and consolidation below the support of 1.3388, which will lead to a wave of decline in the pound and to the exit to the lows of 1.3340 and 1.3290, where I recommend fixing the profits. If the pair grows in the second half of the day and bears are not active in the area of 1.3437, it is best to stop selling before the resistance test of 1.3489, where you can also sell the pound immediately on the first test with the aim of a correction of 20-30 points within the day. But at the same time, you need to understand that in the event of good news on Brexit, the pound can quickly recover to the maximum of 1.3534.

Let me remind you that in the COT reports (Commitment of Traders) for December 8, there is a significant interest in the British pound. Long non-commercial positions increased from the level of 37,087 to 39,344. At the same time, short non-commercial positions fell from 44,986 to 33,634. As a result, the non-commercial net position turned positive and jumped to the level of 5,710 against a negative value of -7,899 a week earlier. All this suggests that traders are ready to bet on further strengthening of the pound at the beginning of next year and the preponderance of buyers, even in the current situation, when there is no agreement on a trade agreement, and a little more than two weeks are left until the end of the year.

Signals of indicators:

Moving averages

Trading is above 30 and 50 daily averages, which indicates that the pound will continue to recover 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 classic daily moving averages on the daily chart D1.

Bollinger Bands

If the pair declines, the average border of the indicator around 1.3340 will act as support.

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.