FX.co ★ GBP/USD: trading plan for the US session on March 3 (analysis of morning deals)

In my morning forecast, I focused on the level of 1.1994 and offered recommendations based on it for market entry decisions. Let's take a look at the 5-minute chart and see what happened. The pound received a sell signal due to growth and the development of a false breakout at this level, but a significant downward movement has not yet occurred. The technical image was changed in the afternoon.

You require the following to open long positions on the GBP/USD:

We were unable to exceed 1.1994 due to data on activity in the UK services sector, but I have not yet detected any significant pressure on the pound. Most likely, similar data for the United States will receive more attention; nonetheless, I have revised the nearest support and resistance levels, on which I will focus. The pound should weaken as a result of strong ISM data on the US non-manufacturing purchasing managers' index; however, I won't take any action until a false breakout has developed in the area of the new support level of 1.1966, which was established by the day's first half of results. In my opinion, this will provide an excellent entry point to purchase with the possibility of a breakthrough to the new resistance of 1.2014, above which it will be difficult to exit, but it is still conceivable, especially at the end of the week. I will wager on the movement of the GBP/USD up to a maximum of 1.2070 when fixing and testing from top to bottom at 1.2014 against the backdrop of weak US data. A retreat above this level will also bring growth opportunities to 1.2119, where I've fixed profits. A test of this area will likewise show that the buyers' market has returned. Things will only get worse if the bulls are unable to handle the tasks and miss 1.1966, which is highly possible. In this situation, I advise against making hasty purchases and to only start long positions around the minimum price from last month (1.1917) and only in the event of a false collapse. This level has already been tried three times, so it doesn't have much hope. As soon as the price rises over the 1.1875 minimum, I will buy GBP/USD with the intention of a 30- to 35-point correction during the day.

For opening short positions on the GBP/USD, you will need:

The sellers completed the tasks assigned for the first half of the day and held the targeted resistance level, but it appears that by the conclusion of the week, no more sellers were available. I won't make any hasty sales and will instead wait for the update of 1.2014 with the new resistance. If a false breakout forms at this level, it will be a sign to buy or sell with the expectation of a decline to the support level of 1.1966, which was created today during the European session. Buyers' hopes for a correction will be dashed by an exit to 1.1966 with a breakout and a bottom-up test, which will make the market bearish with a sell signal and a decline to 1.1917. The 1.1875 area will be my furthest target, where I'll set the profit. The situation will stabilize with the possibility of GBP/USD growth and the lack of bears on 1.2014, and by the end of the week, the bulls will attempt to enter the market for equilibrium. In this scenario, the bears will pull back, and an entry point into short positions will only come from a false breakout at the next resistance level of 1.2070. In the absence of action, I will sell GBP/USD immediately from the high of 1.2119, but only if the pair falls by 30-35 points within the day.

There were more long positions and fewer short ones in the COT report (Commitment of Traders) for January 31. Traders chose to leave the market before the meeting because they were betting on a future hike in interest rates from the Bank of England. However, it should be noted that these data are of no importance right now because statistics are only just starting to catch up following the cyberattack on the CFTC and the information from a month ago is not very pertinent right now. They will wait for new reports to be released before relying on more recent statistics. Except for a few reports, there are no significant fundamental indicators for the US economy this week, so the pressure on risky assets may lessen slightly. In principle, this may increase the pound's value relative to the US dollar. According to the most recent COT data, short non-commercial positions fell by 4,139 to 54,551, while long non-commercial positions rose by 1,478 to 36,234. As a result, the non-commercial net position's negative value declined to -18,317 from -23,934 a week earlier. In comparison to 1.2350, the weekly ending price dropped to 1.2333.

Signals from indicators

Moving Averages

Trade is concentrated between the 30 and 50-day moving averages, which may cause the pound to correct higher towards the end of the week.

Notably, the author considers the time and prices of moving averages on the hourly chart H1 and departs from the standard definition of the traditional daily moving averages on the daily chart D1.

Bands by Bollinger

The indicator's lower limit, which is located around 1.1930, will serve as support in the event of a downturn.

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, use the futures market for speculative purposes and to 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.