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

The bulls yesterday did not receive confirmation that Brussels could really make concessions to the UK, and after the news on the assistance plan proposed by the European Commission, the pound began to quickly lose its position, forming fairly good sell signals, which I spoke about in yesterday's forecast. If you look at the 5-minute chart, you will see how a break and consolidation below 1.2290 support in the afternoon, as well as a test from the bottom up, became a good entry point to short positions that quickly pulled down the pound to 1.2252, and then led to a test of a low of 1.2206. It was from 1.2206 that I advised then opening long positions, which also allowed me to take more than 50 points from the market after returning to resistance 1.2255. Let me remind you that you need to be very careful with purchasing the pound, since the latest Commitment of Traders (COT) report for May 19 recorded a sharp increase as short. The COT report states that during the week short non-profit positions increased to the level of 54,799, from the level of 45,213, while long non-profit positions increased only from the level of 31,525 to 35,820. As a result, the non-profit net position became even more negative and was at the level of –18,989, against –13,668, which so far indicates a bearish trend in GBP/USD. Buyers need a breakout and consolidation above the resistance of 1.2280 today to return the market to their control, to begin with it is enough to form a false breakout in the support area of 1.2233, as this will keep hopes of a pound recovery in the short term. The immediate goal of the bulls will be this week's high at 1.2348, where I recommend taking profits. In case the pound falls supporting 1.2233, it is best to postpone long positions to a test of a low of 1.2162, from where you can open long positions immediately for a rebound while expecting a correction of 30-40 points by the end of the day.

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

The sellers' task for the first half of the day is to return 1.2233 support to themselves, since consolidating below this level will be a signal to open short positions, which will quickly pull down GBP/USD to the low of 1.162 and 1.2122, where I recommend taking profit. Given that important fundamental statistics for the UK are not published today, traders will be waiting for reports on US GDP and the labor market, which will be released closer in the afternoon. If the bulls make an attempt to push the pair in the morning, then you can expect short positions in the pound once a false breakout is formed at 1.2280, but you can sell GBP/USD immediately for a rebound only at this week's high at 1.2345 or even higher, from the 1.2425 level while aiming for a slight correction down at the end of the day at 30-40 points.

Signals of indicators:

Moving averages

Trading is carried out below 30 and 50 moving averages, which gradually cross over, forming a strong bearish signal.

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

Bollinger bands

If the pair decreases, support will be provided by the lower border of the indicator in the region of 1.2200. Growth will be limited by the upper level of the indicator in the area of 1.2320.

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 traders are speculators, such as individual traders, hedge funds and large institutions that use the futures market for speculative purposes and meet certain requirements.
• Long nonprofit positions represent the total long open position of nonprofit traders.
• Short nonprofit positions represent the total short open position of nonprofit traders.
• The total non-profit net position is the difference between the short and long positions of non-profit traders.