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

In the first half of the day, quite a lot of signals were formed to enter the market. Let's look at the 5-minute chart and analyze the entry points. The formation of a false breakout in the resistance area of 1.3914, where I recommended selling the euro in my morning forecast, led to the formation of a good entry point for selling, which increased pressure on the pair and dropped it to the support area of 1.3863. The breakout and consolidation below this level with a reverse test (which was only 3 points short) - all this together led to the formation of another entry point for the sale of the pound, which pushed it into the area of the distant morning support of 1.3814, where I recommended buying the pair immediately for a rebound. At the time of writing, the upward movement from the level of 1.3814 was about 20 points.

It hardly makes sense to review the levels that worked well today. The primary task of the bulls is to regain control over the resistance of 1.3863. Only fixing above this range will lead to the formation of a good entry point in the expectation of restoring the pair to the resistance area of 1.3914, where I recommend taking the profits. However, given the fact of a major fall in the pound, it is unlikely that the bulls will be able to implement this scenario. In the case of a decline in GBP/USD in the second half of the day, it is best to count on long positions from the low of 1.3814, but only if a false breakout is formed there. Now you can buy GBP/USD immediately for a rebound only from the support of 1.3760, counting on an upward correction of 25-30 points within the day.

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

Sellers have fully coped with their tasks for the first half of the day, and now they need to prove their presence in the market already during the American session. This can be done only by protecting the resistance of 1.3863, where the formation of a false breakout, by analogy with the entry point that I discussed above, will lead to the formation of a new sell signal for GBP/USD. In this case, the goal will be to break the next local low of 1.3814, which will only increase the pressure on the pair and open a direct road to the area of 1.3760, where I recommend taking the profits. In the scenario of no pressure on the pound in the resistance area of 1.3863 and good news and economic forecasts from the International Monetary Fund, it is best to postpone short positions until the update of the maximum of 1.3914, where you can sell the pound immediately for a rebound in the expectation of a downward correction of 25-30 points within the day.

Let me remind you that the COT reports (Commitment of Traders) for March 30 recorded a reduction in both long and short positions, while the total non-commercial net position increased. The bulls were active last week with each approach of the pound to large support levels, which led to such confusion in the market. The data that was released on the UK economy allowed us to build a new upward correction for the pound, even if only in the short term. Among investors and economists, confidence continues to grow that the UK economic recovery is gaining quite a good momentum, which will support the British pound in the summer of this year, as disagreements increase in the Bank of England over how the economy will develop further and when to respond to all this. Those who expect to buy the pound should take a closer look at the market. Thus, long non-profit positions declined from 51,843 to 47,222. At the same time, the short non-profit fell from 30,024 to 22,263, indicating a major revision of forces in the market in the near future. As a result, the non-profit net position rose to 29,959 from 21,819 a week earlier. The weekly closing price fell to 1.3774 from 1.3859.

Signals of indicators:

Moving averages

Trading is conducted below 30 and 50 daily averages, which indicates an attempt by the bears to seize the initiative 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

The growth of the pound will be limited in the area of the average border of the indicator 1.3885.

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.