08.01.202515:53 Forex Analysis & Reviews: GBP/USD: Trading Plan for the U.S. Session on January 8th (Analysis of Morning Trades)

In my morning forecast, I focused on the 1.2470 level and planned to make trading decisions based on it. Let's look at the 5-minute chart and analyze what happened. The breakout occurred, but the retest missed by just a few points, preventing entry into short positions, leaving me without trades. Buys on the rebound from 1.2354 did not yield significant profits. The technical picture was slightly revised for the second half of the day.

For opening long positions on GBP/USD:

The pound plummeted by more than one percent without any apparent reason, further demonstrating the sellers' full market control and traders' concerns over the actions of Donald Trump's new administration. In the second half of the day, we anticipate ADP employment change data and initial jobless claims numbers from the U.S., as well as a speech by FOMC member Christopher Waller. The publication of the FOMC minutes will be the cherry on top, though it is unlikely to reveal anything new. However, a more cautious approach by officials toward further rate cuts in the U.S., widely expected now, could lead to further dollar strengthening against the pound.

If the pair declines amid strong data, buyers are expected to appear around the new support at 1.2311, which was narrowly missed earlier today. A false breakout there will provide a good entry point for buying, aiming to restore GBP/USD to the resistance level of 1.2354, where it is currently trading. A breakout with a retest of this range from above will offer a new entry point for long positions, targeting 1.2391, where buyers will likely face resistance. The ultimate target will be the level of 1.2432, where I plan to take profits. If GBP/USD falls and buyers show no activity at 1.2311, the pound could drop even further. In that case, only a false breakout around the next support at 1.2265 would be a suitable condition for opening long positions. I plan to buy GBP/USD immediately on a rebound from the 1.2229 low, targeting a 30–35 point intraday correction.

For opening short positions on GBP/USD:

Pound sellers dominate the market, and a slight correction, likely triggered by U.S. data, would be enough for them to take action. A false breakout around 1.2354 will suffice to open new short positions, targeting a drop to the 1.2311 level. A breakout and retest of this range from below will trigger stop orders, paving the way to 1.2265, signaling the establishment of a new bearish market. The ultimate target will be the level of 1.2229, where I will take profits. If demand for the pound returns after U.S. data and sellers fail to show activity around 1.2354, bears will likely retreat to the resistance at 1.2391. I will sell there only on a false breakout. If no downward movement occurs there, I will look for short positions on a rebound around 1.2432, but only for a 30–35 point intraday correction.

The COT report (Commitment of Traders) for December 31 showed an increase in both long and short positions. Overall, there was no significant change in the balance of power, as many traders adopted a wait-and-see approach following the Bank of England's final meeting of the year. The regulator's future stance remains uncertain, so attention is likely to shift toward Donald Trump's inauguration rather than the fate of the UK's interest rates. If Trump's position is softer and does not involve restrictive tariffs on the UK, the pound could regain its position and strengthen. Otherwise, significant growth for the GBP/USD pair in the near future is unlikely. The latest COT report indicated that long non-commercial positions increased by 1,644 to 86,202, while short non-commercial positions added 132, reaching 65,367. As a result, the gap between long and short positions widened by 1,226.

Indicator Signals:

Moving Averages:Trading is conducted below the 30 and 50-day moving averages, indicating further decline for the pair.Note: Moving averages are considered on the H1 hourly chart, differing from the classical daily moving averages on the D1 chart.

Bollinger Bands:In case of a decline, the lower boundary of the indicator around 1.2391 will act as support.

Indicator Descriptions:

• Moving Average (MA): Determines the current trend by smoothing out volatility and noise. Period – 50 (yellow on the chart) and 30 (green on the chart).
• MACD Indicator: Measures the convergence/divergence of moving averages. Fast EMA – period 12, Slow EMA – period 26, SMA – period 9.
• Bollinger Bands: Uses a 20-period setting.
• Non-commercial traders: Speculators like individual traders, hedge funds, and large institutions using the futures market for speculative purposes.
• Long Non-commercial Positions: Represent the total long open positions held by non-commercial traders.
• Short Non-commercial Positions: Represent the total short open positions held by non-commercial traders.
• Non-commercial Net Position: The difference between short and long positions of non-commercial traders.