FX.co ★ GBP/USD: plan for the US session on June 11 (analysis of morning trades)

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

In my morning forecast, I paid attention to the level of 1.4156 and recommended that you decide on entering the market from it. Let's look at the 5-minute chart and talk about what happened in the end. In the first test, the bulls defended the level of 1.4156 and formed a false breakout, which led to a great buy signal in continuation of the bullish trend that was observed yesterday. However, the pair did not go up immediately, and after a while, the bears managed to take out stop orders below this level and retreated from the market. Considering that the pair is now returning to 1.4156, the strategy for the second half of the day has not changed much.

To begin with, buyers need a normal consolidation above 1.4156, followed by its update from top to bottom, which will confirm their presence in the market. Only after that can you open long positions with the expectation of a repeated return to the area of the maximum of 1.4196, which is also the upper limit of the current side channel. Insufficient data on the US can lead to a breakdown and consolidation above the level of 1.4196, the test of which from top to bottom forms an additional entry point into long positions with an exit to the maximum of 1.4241, where I recommend taking the profits. If buyers still fail to offer anything during the US session at the level of 1.4241, and trade continues around this range, it is best to postpone long positions immediately for a rebound from the large support of 1.4121, which was formed at the end of yesterday. You can buy GBP/USD immediately on the rebound with the aim of an upward correction of 20-25 points within the day.

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

Sellers of the pound tried to do everything to achieve a breakdown of the support of 1.4156. However, the market does not want to go down. Bears still need to think about how to return the support of 1.4156 under control because it is unlikely that they will be able to count on a new downward trend without it. Strong data on the consumer sentiment index from the University of Michigan and inflation expectations in the United States may again lead to a breakdown of the support of 1.4156, followed by its update from the bottom up. If this condition is met, you can open short positions to continue the pair's decline to the minimum in the area of 1.4121. A more distant goal will be the support of 1.4086, where I recommend fixing the profit. In the case of GBP/USD growth in the second half of the day after the US data, the bears should focus on forming a false breakout in the resistance area of 1.4196. If sellers do not show any activity, it is best to postpone sales until the update of the new resistance of 1.4241, where you can open short positions on the pound immediately for a rebound in the expectation of a downward correction of 20-25 points within the day.

Let me remind you that the COT reports (Commitment of Traders) for June 1 recorded a minimal increase in long positions and a very large increase in short positions, which was proof of a sharp drop in the pound. Statements from the Bank of England representatives no longer work, as market participants need concrete actions, not promises. It will be very difficult for the bulls to break through to new local highs. The risk of a later opening of the UK economy due to the spread of the Indian strain of coronavirus also creates several obstacles for buyers of the pound. However, as soon as the central bank begins to take inflation seriously and talk about changes in the volume of the asset purchase program, demand for GBP/USD will immediately return. Therefore, the best scenario is to buy at every good decline in the British pound against the US dollar. The COT report indicates that long non-commercial positions rose from the level of 64,193 to the level of 64,204. However, short non-commercial positions rose much stronger from 33,534 to 40,079, indicating the emergence of new sellers in the market after the pair reached another local high. As a result, the non-profit net position decreased from 30,659 to the level of 24,125. Last week's closing price changed to 1.42270 against 1.41553.

Signals of indicators:

Moving averages

Trading is conducted in 30 and 50 daily averages, which indicates the lateral nature of the market.

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

Bollinger Bands

A break of the lower limit of the indicator in the area of 1.4140 will increase the pressure on the pound. In the case of growth, the upper limit of the indicator in the area of 1.4185 will act as a 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 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 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.
• Total non-commercial net position is the difference between the short and long positions of non-commercial traders.