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

Yesterday there were some good signals to enter the market. Let's take a look at the 5 minute chart and break down the entry points. In the first half of the day, the first attempt to rise above resistance at 1.4108 was unsuccessful, and the bulls failed to settle there. For the second attempt, this level was tested from the bottom up, which confirmed how precise the entry point for short positions was. And for the third time, we have collected stop-orders of those who have sold from 1.4108 and have already pulled everything to breakeven, and so it returned to the area below 1.4108, counting on a more powerful decline from the pair in the afternoon. However, we did not reach the target level, and the downward movement was around 25 points. In my afternoon review, I focused on the resistance at 1.4114 and advised you to open long positions from it. A breakthrough, consolidation and test of this level from top to bottom had created an excellent entry point into sustaining the bull market. As a result, the upward movement was about 50 points.

Before examining the technical picture of the pound, let's take a look at what happened in the futures market. And although there are no major changes there, you need to understand what is happening with the positions of major players. The Commitment of Traders (COT) reports for May 11 revealed that both long and short positions have increased. All this happened against the background of a slight downward correction from the pair, which was fully won back after we received good indicators on the rate of contraction of the UK economy in the first quarter 2021. Last month's growth also gave investors hope that the British pound will continue to gain strength. And almost all quarantine restrictions will be lifted in the UK at the beginning of summer, given the good pace of vaccination against coronavirus, we can assume a sharp recovery in GDP in the second quarter of 2021, which will be the highest in the history of the indicator. Such news strengthens investor confidence in the British pound and its prospects. The COT report indicated that long non-commercial positions rose from 52,262 to 64,947. At the same time, short non-commercial positions increased from 32,414 to 36,771, resulting in a non-commercial net position increased to 28,176 from 19,848 a week earlier. Last week's closing price also jumped to 1.41308 against 1.39033.

The main task for today is to keep support at 1.4139 under the bulls' control, which can be tested after the release of data on the unemployment rate in the UK. Forming a false breakout creates another signal for you to open long positions in continuation of the bull market that we have been observing since the end of last week. In such a scenario, one can count on an update and a test of resistance at 1.4201, rising above which will not be so easy. Only a good report on the labor market can become an impetus for building up new long positions, and a downward test of the level of 1.4201 will open a direct path for GBP/USD to highs of 1.4241 and 1.4310, where I recommend taking profits. If the pound is under pressure again, and the bulls are not active in the support area of 1.4139, then I recommend not to rush into long positions. The optimal scenario is to open longs immediately on a rebound from support at 1.4078 or even lower - from the 1.4009 level, counting on an upward correction of 25-30 points within the day.

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

The bears need to think of a way to regain control of support at 1.4139. One should hardly expect a disappointing report on the labor market, especially with the kind of support it is getting from the government. Only a breakthrough and consolidation below the level of 1.4139 with a reverse test of it from the bottom up can create a good entry point to short positions in hopes that the pair would return to the area of 1.4078. The next target will be 1.4009, where I recommend taking profits. If we see the pound rising during the European session, then the bears will think of a way to defend resistance at 1.4201. Forming a false breakout there can create an entry point into short positions. If the bears are not active in this range, then it is best to refrain from short positions until a large local high in the 1.4241 area is renewed, or even higher - from a high of 1.4310, counting on a downward correction of 20-25 points within the day.

Indicator signals:

Trading is carried out above 30 and 50 moving averages, which indicates that the pound will continue to rise in the short term.

Moving averages

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

Surpassing the lower boundary at 1.4185 will lead to a new wave of decline for the pair. Surpassing the average limit of the indicator in the area of 1.4139 can sustain the bullish trend.

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