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

Quite a lot of interesting signals formed to enter the market for both short and long positions on the pound. Let's take a look at the 5 minute chart and figure out all the entry points. I paid attention to 1.3788 and advised to act depending on the situation: a false breakout and reverse test of this area resulted in forming a signal to open short positions. But even if you did not have time to enter the market the first time, a similar situation formed by mid-day, and weak inflation data in the UK discouraged traders from fighting, which brought the pound to the 1.3748 area. Already in the second half of the day, we saw an update and the formation of a false breakout at this level, which resulted in creating a signal to open long positions. As a result, the pair returned to weekly highs in the 1.3828 area, and the movement from the entry point was about 80 points.

As of today, there are no important fundamental statistics, which may well play into the hands of bulls of the pound, who are counting on the breakthrough of weekly highs and the continuation of the upward trend. The data on the balance of industrial orders from the Confederation of British Industry is unlikely to somehow affect the market, so it is better to focus on the technical picture. The primary task of the bulls for today will be to protect the intermediate support at 1.3811, in the area of which the moving averages are, playing on their side. Since the trend is upward, the formation of a false breakout at this level creates a good entry point for long positions with the goal of breaking through weekly highs and updating the level of 1.3849. Consolidating above this range with a reverse test from top to bottom will allow the British pound to get to new local levels: 1.3877 and 1.3910, where I recommend taking profits. The next target is still 1.3955. In case the bulls are not active in the 1.3811 area, the best option for buying the pound would be to test the next support at 1.3777, however, I advise you to open long positions only after a false breakout there. You can observe buying GBP/USD immediately for a rebound only from the low of 1.3744, which acts as a kind of lower border of the horizontal channel. There you can count on a correction of 25-30 points within the day.

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

The bears have no chance yet. The only option for them today is a quick return under the control of support 1.3811. However, before that you need to try not to miss the weekly highs. In general, the tasks are not easy, especially given the lack of important macroeconomic indicators for the UK. As I noted, an important goal for the bears is to regain control over the support level of 1.3811, as there are moving averages playing on the side of the bulls. A breakthrough of this area and its reverse test from the bottom up will form a signal to open short positions in hopes that the pair would fall to 1.3777. You can follow the bulls' stop orders below 1.3777 and finally finish them off, which will lead to the renewal of the low at 1.3744, where I recommend taking profits. In case the pound recovers further, only the formation of a false breakout in the resistance area of 1.3849 will be a signal to open short positions in GBP/USD. I recommend selling the pound immediately on a rebound from a larger resistance at 1.3877, or even higher - from a high of 1.3910, counting on the pair's rebound down by 20-25 points within the day.

I recommend for review:

The Commitment of Traders (COT) report for October 12 revealed a reduction in both short and long positions, but there were more of the former, which led to a slight recovery in the negative net position. Despite rather active attempts by the bears at the beginning of that week to resist the bullish trend, bulls turned out to be stronger, which led to further growth of the pound against the US dollar. Reducing a number of problems with disruptions in supply chains that shook the pound earlier this month, are now gradually returning to the market players who are betting on further strengthening of risky assets. Constant speeches and statements by representatives of the Bank of England that it is necessary to take inflationary pressures more seriously, also add confidence to the pound bulls. The minutes of the central bank meeting last week confirmed the BoE's intentions to take seriously the option of raising interest rates during the November meeting - a bullish signal for GBP/USD. Therefore, the only problem that stands in the way of the pound bulls is the US Federal Reserve. Although they are not going to raise interest rates, they are also heading for tightening monetary policy. However, the British pound in these conditions looks much more preferable. The COT report indicated that long non-commercial positions declined from 48,137 to 46,794, while short non-commercials dropped from 68,155 to 58,773, which partially reduced the advantage of sellers over buyers. As a result, the non-commercial net position amounted to 11,979 against -20,018. The closing price of GBP/USD remained almost unchanged for the week: 1.3591 against 1.3606.

Indicator signals:

Moving averages

Trading is carried out above 30 and 50 moving averages, which indicates the formation of a new bullish scenario.

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

Bollinger Bands

In case of growth, the upper border of the indicator in the area of 1.3860 will act as a resistance. As a support, we can count on the lower border of the indicator in the area of 1.3770.

Description of indicators

• Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart.
• Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart.
• MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9
• Bollinger Bands (Bollinger Bands). Period 20
• Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and 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 short and long positions of non-commercial traders.