FX.co ★ GBP/USD: trading plan for the American session on June 12 (analysis of morning deals). The pound has reached new monthly highs

In my morning forecast, I drew attention to the level of 1.2587 and recommended making trading decisions based on it. Let's look at the 5-minute chart and analyze what happened there. Active resistance from sellers at the 1.2587 level allowed entering short positions, but there was no downward movement, leading to taking trade losses. The technical picture was slightly revised for the second half of the day.

To open long positions on GBP/USD, the following conditions are required:

Considering the absence of US statistics and the bullish market for the pound, I will act based on the nearest support level at 1.2585, formed during the first half of the day. A false breakout at this level will signal a buy opportunity with the prospect of a new upward move toward the resistance at 1.2611. Only a breakthrough and a subsequent retest from above to below this range will provide an additional signal to open long positions, strengthening the presence of bulls in the market with a target movement towards 1.2636, reinforcing the upward trend. The ultimate target will be around 1.2674, where profit will be taken.

In the scenario of a pound decline towards 1.2585 and a lack of activity from buyers, pressure on the pair will return as it becomes evident that bulls failed to hold on to the monthly highs. In that case, I will postpone entering the market until the support at 1.2560, where the moving averages are located, playing in favor of the bulls. I will only open long positions there on a false breakout. I plan to buy GBP/USD on a rebound from 1.2534 with a 30-35 point correction target within the day.

To open short positions on GBP/USD, the following conditions are required:

Sellers attempted to reenter the market during the first half of the day, but a downward movement did not materialize. Considering the bullish market we have been observing recently, I did not keep my short positions open and decided to exit the market with minimal losses. I will only open short positions after GBP/USD rises to the next monthly high, around 1.2611. A false breakout at that level will signal to sell, allowing downward movement towards the support at 1.2585. A breakout and a subsequent retest from below to above this range will restore the chances of a downward correction, signaling an opportunity to open short positions with a decline toward 1.2560. The ultimate target remains at the minimum of 1.2534, where I will take profit. Buyers will continue to dominate if GBP/USD continues to rise and there is no activity at 1.2611. In that case, I will postpone selling until testing the resistance at 1.2636. A false breakout there will be an entry point for short positions. I plan to sell GBP/USD on a bounce from the May high of around 1.2674, but only expecting a 25-30 point correction within the day.

The COT (Commitment of Traders) report for May 30 showed a decrease in short positions and an increase in long positions. The pound has declined significantly, but good statistics released last week helped halt the decline and partially offset the losses in May. However, with expectations that the Federal Reserve will continue to raise interest rates, the upward potential of the pair is limited. Despite the Bank of England's pause regarding its monetary policy in June, an overheated labor market will only allow the committee to halt the tightening cycle for a short time. Faced with further uncertainty from the Bank of England's monetary policy, this will exert clear pressure on the British pound. The latest COT report states that short non-commercial positions decreased by 529 to 57,085, while long non-commercial positions increased by 1,117 to 70,320. This led to an increase in the non-commercial net position to 13,235 from 11,059 the previous week. The weekly price declined to 1.2398 from 1.2425.

Indicator signals:

Moving Averages

Note: The author considers the period and prices of the moving averages on the hourly chart (H1), which differs from the general definition of classical daily moving averages on the daily chart (D1).

Bollinger Bands

In case of a decline, the lower boundary of the indicator, around 1.2560, will act as support.

Description of indicators:

• Moving average (determines the current trend by smoothing volatility and noise). Period 50. Marked in yellow on the chart.

• Moving average (determines the current trend by smoothing volatility and noise). Period 30. Marked in green on the chart.

• MACD indicator (Moving Average Convergence/Divergence - convergence/divergence of moving averages). Fast EMA period 12. Slow EMA period 26. SMA period 9.

• Bollinger Bands. Period 20.

• Non-commercial traders - speculators such as individual traders, hedge funds, and large institutions using the futures market for speculative purposes and meeting 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.

• The net non-commercial position is the difference between non-commercial traders' short and long positions.