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

The growth of the pound in the first half of the day was not surprising. It was expected that buyers will try to recover from yesterday's fall, but as you can see on the 5-minute chart, problems with growth above 1.3172 remain. It was not possible to wait for the formation of an adequate entry point from this level, which indicates an active struggle.

All that is required for buyers of the pound in the afternoon is weak data on consumer confidence in the US and inflation expectations of the University of Michigan, which will lead to a real consolidation of GBP/USD above the level of 1.3172. However, I recommend opening long positions from it only after testing this level from top to bottom. In this scenario, we can expect a re-growth of GBP/USD to the resistance area of 1.3248, and a longer-term goal will be a maximum of 1.3310, where I recommend fixing the profits. In a scenario of falling GBP/USD in the second half of the day, it is best not to rush into purchases, but wait for the test of the major support at 1.3094 and buy the pound there on a rebound with the aim of a 30-40 point correction within the day.

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

Bears are still struggling to maintain control over the level of 1.3172, and good fundamental data on the US economy should help them in this. However, I recommend opening short positions in the area of 1.3172 only after the GBP/USD returns to this level and consolidates under it. Testing it from the bottom up will be a good sell signal. In this scenario, you can count on a downward trend in the area of 1.3094, with the first test of which you can observe a slight rebound of the euro up. A longer-term goal is the support of 1.3034, where I recommend taking the profit. If the data on US producer prices disappoints, and the pound continues its growth above the resistance of 1.3172, it is best not to rush into sales, but wait for the test of a larger maximum of 1.3248 in the expectation of a correction of 30-40 points within the day.

Let me remind you that in the COT reports (Commitment of Traders) for November 3, there was a reduction in long positions and a slight increase in short ones. Long non-commercial positions fell from 31,799 to 27,701. At the same time, short non-commercial positions rose just slightly to 38,928 from 38,459. As a result, the negative non-commercial net position was -11,227 against -6,660 a week earlier, which indicates that the sellers of the British pound retain control and their minimal advantage in the current situation.

Signals of indicators:

Moving averages

Trading is conducted around 30 and 50 daily averages, which indicates an active struggle between buyers and sellers.

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

Only a break of the lower border of the indicator in the area of 1.3094 will lead to a new downward wave of 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.