FX.co ★ GBP/USD: plan for the US session on September 30 (analysis of morning deals). The pound froze in the side channel, and the bears took a short pause before the Senate vote on the debt limit

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

Although the pound was locked in a side channel in the first half of the day, volatility remained fairly high, which led to the formation of two signals to enter the market and allowed to earn a little. Let's look at the 5-minute chart and talk about where it was possible and necessary to enter the market. It is seen how the decline in the first half of the day to the level of 1.3419, which happened after the release of good data on UK GDP, led to the formation of a false breakdown and a signal to open long positions, which I paid attention to in the morning forecast. Then there was an increase to the resistance of 1.3466. The bears declared themselves, forming an excellent entry point into short positions to continue the trend on a false breakdown. At the time of writing, the pair has already fallen by more than 30 points. For the second half of the day, from a technical point of view, nothing has changed. Only the next formation of a false breakdown at the level of 1.3419 forms a signal to open long positions against the trend in the expectation of a repeated recovery to 1.3466, where moving averages also pass, limiting the upward potential of the pair. As proof of this, there were morning sales from this level. Only a breakthrough and a test of this area from top to bottom against the background of weak data on the US labor market, or good news from the US Senate - all this will form an additional entry point into long positions with the aim of GBP/USD growth to the intermediate resistance of 1.3505. A more distant target will be the 1.3550 area, where I recommend fixing the profits. In case of further decline of the GBP/USD pair in the second half of the day, it is best not to rush with long positions according to the trend. The optimal scenario will be the pound purchase from the minimum of 1.3372 but subject to the formation of a false breakdown. I advise you to open long positions in GBP/USD immediately for a rebound in the area of 1.3308, or even lower - from 1.3193 with the aim of an upward correction of 15-20 points inside the day.

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

The bears coped with the initial task in the first half of the day. However, this is not enough to continue the downward trend. Only the next formation of a false breakdown at this level during the American session will act as an additional signal to open short positions on the trend. In this case, we can expect a further decline in GBP/USD to the area of the annual minimum of 1.3419, which could not be broken below during the European session. A breakthrough and a reverse test of this area from the bottom up, together with disappointing news from the US Senate — all this will hit the next stop orders of the bulls and form an additional entry point into short positions to reduce GBP/USD to 1.3372. With very active sales of the pound during the speech of the Federal Reserve System representatives, the target will be the lows of 1.3308 and 1.3193, where I recommend fixing the profits. In the absence of active actions of bears in the area of 1.3466, there will be no reason to panic. I advise you to postpone sales until the next major resistance of 1.3505, from where I also recommend opening short positions only if a false breakdown is formed. It is possible to sell GBP/USD immediately for a rebound from the maximum of around 1.3550, based on a downward correction of 25-30 points within a day.

The COT reports (Commitment of Traders) for September 21 recorded both a sharp increase in short ones and an increase in those who bet on further growth of the pound. The meeting of the Bank of England on monetary policy, which took place last week, significantly influenced the mood of buyers of risky assets. The decision to raise rates in November this year will support the pound buyers in any serious downward corrections of the pair, so it is best to bet on the growth of GB/USD in the medium term. Worsening inflation may force the Bank of England to act more aggressively, which is also an additional signal to buy the pound. The only problem that stands in the bulls' way is the Federal Reserve System, although it is not going to raise interest rates yet. However, it is also going along the path of tightening monetary policy. The lower the pound falls, the more active buyers of risky assets will be, betting on real changes in the monetary policy of the Bank of England in the future. The COT report indicates that long non-commercial positions increased from 44,161 to the level of 51,910.

In contrast, short non-commercial positions jumped almost one and a half times - from the level of 39,371 to the level of 52,128, which led to the complete capitulation of the advantage of buyers in the market and the preponderance towards sellers of the pound. As a result, the non-commercial net position regained its negative value and dropped from 4,790 to the level of -218. The closing price of GBP/USD fell 1.3837 to 1.3662 last week.

Signals of indicators:

Moving Averages

Trading is below 30 and 50 daily averages, which indicates the bearish nature of the market.

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 recovery of the pound, the average border of the indicator in the area of 1.3466 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 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.