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

Yesterday, three profitable signals to enter the market were formed at once. The pound does not often provide such inputs, but yesterday everything was like a textbook. Let's take a look at the 5-minute chart and analyze all the entry points. In the first half of the day, I advised you to open long positions in case a false breakout forms at the 1.3752 level, which happened. The chart clearly shows how the bulls are protecting support at 1.3752, afterwards the pair settled above this range, forming an excellent entry point into long positions. As a result, the upward movement was around 25 points. Closer to the US session, the bears pulled down the pair below 1.3725, afterwards this level was tested from the bottom up, which resulted in forming a good sell signal. As a result, the pound fell to the support area of 1.3708, which made it possible to take another 40 points from the market. Recall that I advised you to open long positions on the rebound from the support of 1.3708, which brought about 25 more points.

Quite important fundamental reports for the UK will be released today. The report on changes in the volume of GDP for the fourth quarter may lead to a small spike in volatility, as well as data on the current account balance of the balance of payments and the overall change in investment. Bulls have a lot of tasks: first is to protect support at 1.3708, forming a false breakout there creates a signal to enter long positions in hopes to renew growth in GBP/USD so it can reach resistance at 1.3752, where the moving averages that limits the pair's growth potential pass... The second task is to surpass and settle above this level, which will strengthen the pound's position and lead to a new high of 1.3797, where I recommend taking profits. If bulls are not active in the support area of 1.3708, it is best not to rush into long positions: the best option is to open long positions immediately on a rebound from the 1.3670 low, counting on an upward correction of 25-30 points within the day. The next big support is seen at 1.3639.

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

The bears' initial task is to break through and settle below yesterday's low at 1.3708. Testing it from the bottom up following the breakthrough can create a good signal to open new short positions in hopes that GBP/USD will continue falling to the month's lows to the 1.3670 area, where I recommend taking profits. Being able to test this area will completely cancel out the bulls' plans for a quick rise in the pound. A disappointing report on UK GDP is likely to lead to a breakthrough and consolidation below 1.3670, opening a direct path to the 1.3639 low. An equally important task for the bears is to protect resistance at 1.3752. Forming a false breakout there creates a good entry point into continuing the downward trend. If sellers are not active and there is an upward correction in GBP/USD, then it would be best not to rush to sell, but wait for the 1.3797 high to be tested, from where you can open short positions immediately on a rebound, counting on a downward correction of 25-30 points within the day. The next major resistance is seen at 1.3797.

The Commitment of Traders (COT) report for March 23 showed that long positions decreased while short ones increased. The pound fell due to the strong dollar, as the US is showing reasonably good growth rates after an active vaccination program carried out this winter and the implementation of a $1.9 trillion support plan. But it is worth paying attention to the fact that recent reports on the UK economy have been quite good, which could be the first signal for the pound's bulls, who are counting on an active medium-term growth of the pair this spring. Given that the data in the COT reports are lagging behind, the picture could dramatically change by the end of this week. There is a growing confidence among investors and economists that a recovery in the UK is just around the corner. This is confirmed by the fact that disagreements are growing in the Bank of England over how the economy will develop further and how to react to this. Those who expect to buy the pound should take a closer look at the market. And so, long non-commercial positions fell from 55,190 to 51,843. At the same time, short non-commercial positions increased from 26,590 to 30,024, which indicates the sellers' control over the market. As a result, the non-commercial net position fell to 21,819 from 28,600 weeks earlier. The weekly closing price dropped to 1.3859 against 1.3898.

Indicator signals:

Moving averages

Trading is carried out below 30 and 50 moving averages, which indicates that the pair's downward correction will continue.

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 upper border of the indicator in the 1.3765 area will lead to a new wave of growth for the pound. A breakthrough of the lower boundary at 1.3705 will raise the pressure on the pair.

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.