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

In my morning forecast, I paid attention to the level of 1.3760 and recommended actions based on it. Let's look at the 5-minute chart and analyze the entry points that were formed: it is clear that at the beginning of the European session, the bulls form a false breakout in the support area of 1.3760, which leads to the formation of a signal to buy the pound. Even before the release of good indicators on manufacturing activity in the UK, the pound went up about 35 points, after which growth stalled. The bulls showed themselves confidence in the repeated test of this range, which keeps the market on their side for now. From a technical point of view, the picture did not change, as the pair remained to trade in a narrow price range.

The buyers of the pound face quite a lot of tasks: the first of them is to protect the support of 1.3760 – they seem to have coped with this. Now we are waiting for the continuation of the growth of GBP/USD to the resistance of 1.3805, beyond which it was not possible to get out of it yesterday. The second task will be to break through and consolidate above the resistance of 1.3805, which will strengthen the position of the bulls and lead to a new high of 1.3846, where I recommend taking the profits. A more distant target will be the area of 1.3914, however, it is not necessary to talk about reaching this level yet. In the scenario of a lack of activity of buyers in the second half of the day and the third test of support at 1.3760, it is best not to rush to buy: the best option is to wait for a downward correction to the larger minimum of 1.3719 and open long positions immediately for a rebound in the expectation of an upward correction of 25-30 points within the day. The next major support is seen in the area of 1.3670.

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

Sellers did not cope with their task for the first half of the day and will now rely on powerful fundamental statistics on the US economy. Only a break and consolidation below the support of 1.3760, where the moving averages are also playing on the side of buyers, will form a good signal to open new short positions in the expectation of continuing to fall GBP/USD to a minimum in the area of 1.3719, where I recommend taking the profits. A test of this area will completely cancel out the bulls' plans for the rapid growth of the pound. A break below 1.3719 and a test of this level from the bottom to the top will open a direct road to the area of 1.3670. In the event of a rise in the pound in the second half of the day, an equally important task for the bears will be to protect the resistance of 1.3805. Only the formation of a false breakout there forms a good entry point. In case of lack of activity on the part of sellers: it is best not to rush with sales, but to wait for the test of the maximum of 1.3846, from where you can open short positions immediately for a rebound in the expectation of a downward correction of 25-30 points within the day. The next major resistance is seen in the area of 1.3914.

Let me remind you that the COT reports (Commitment of Traders) for March 23 recorded a reduction in long positions and a sharp increase in short ones. The fall in the pound is observed due to the strong US dollar, as the US shows quite good growth indicators after an active vaccination program conducted this winter and the implementation of a $ 1.9 trillion support plan. But it is worth paying attention to the fact that recently the data on the UK economy also came out quite good, which may be the first signal for buyers of the pound, who expect an active medium-term growth of the pair in the spring of this year. Given that the data in the COT reports are lagging, the picture could change dramatically by the end of this week. There is gradually growing confidence among investors and economists that the UK economic recovery is just around the corner. This is also confirmed by the fact that the Bank of England is increasingly divided over how the economy will develop further and how to respond to all this. Those who expect to buy the pound should take a closer look at the market. So: long non-profit positions declined from the level of 55,190 to the level of 51,843. At the same time, the short non-profit rose from the level of 26,590 to 30,024, which indicates the control of sellers over the market. As a result, the non-profit net position fell to 21,819 from 28,600 a week earlier. The weekly closing price fell to 1.3859 against 1.3898.

Signals of indicators:

Moving averages

Trading is conducted above 30 and 50 daily averages, which indicates the formation of a sideways nature of the market.

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

Bollinger Bands

A break of the upper limit of the indicator in the area of 1.3800 will lead to a new wave of growth of the pound. A break of the lower limit of the indicator in the area of 1.3760 will increase the pressure on the pair.

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 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.