18.01.202108:51 Forex-elemzések és áttekintések: GBP/USD: plan for the European session on January 18. COT reports (analysis of deals). Pound weakens against dollar amid general decline in investor optimism

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

In my forecast for the first half of the day, I paid attention to the 1.3661 level and advised you to act based on it. Let's take a look at the 5-minute chart and talk about the signals that led to a market entry. Forming a false breakout in the support area of 1.3661 resulted in creating an entry point to the market, as the trend at the end of the previous day was upward. However, nothing came of this signal, and after a slight increase by 15 points, the bears achieved a breakdown of support at 1.3661. Then the situation began to develop in an interesting manner, a slight consolidation below 1.3661 and returning and being able to test this area from the bottom up resulted in creating a signal to sell the pound and caused the euro to fall to 1.3624. The downward movement was around 40 points. I missed the sell positions from the 1.3624 level, which appeared in the afternoon, since I could not wait for a convenient signal to appear. Testing a low at 1.3585, from which I recommended buying the pound immediately on a rebound, made it possible for us to take a couple more points from the market.

Pound buyers need to think of a way to protect support at 1.3567. Forming a false breakout there in the first half of the day creates a signal to enter long positions, which will result in an upward correction to the resistance area of 1.3602. A critical confrontation will begin for this level, since the pound's succeeding direction depends on it. A breakout and consolidation above this area will create another entry point into long positions and will lead to an increase in GBP/USD to the high of 1.3636, where I recommend taking profits. Moving averages also pass there, playing on the side of the sellers of the pound. If buyers are not active at the 1.3567 level, and the situation is likely, since the bulls have nothing to rely on at the beginning of this week, I recommend postponing long positions until the 1.3539 low has been updated, or buy GBP/USD immediately on a rebound in the support area of 1.3505, counting on a correction by 25-30 points within the day.

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

The bears will protect resistance at 1.3602 in every possible way, since the pair's succeeding direction depends on it. Forming a false breakout there in the first half of the day will be a signal to open short positions, and its purpose is a downward correction to the support area of 1.3567, a breakout of which will cause the pound to fall to a low of 1.3539. A distant target at the beginning of this week is support at 1.3505, where I recommend taking profit. No important fundamental statistics expected for today, so we can count on sustaining the downward trend for the pound. If the bears ignore resistance at 1.3602, then it would be best to postpone short positions until the 1.3636 high is updated, where the moving averages pass, playing on the side of the pound sellers. It is possible to open short positions immediately on a rebound in the 1.3668 area, counting on a downward correction of 30-40 points within the day.

The Commitment of Traders (COT) report for January 5 recorded a slight decline in interest in the British pound, but this does not affect the overall picture. Long non-commercial positions decreased from 37,550 to 35,526. At the same time, short non-commercial positions remained practically unchanged and only increased from 31,518 to 31,861. As a result, the non-commercial net position, although it decreased, remained positive and reached 3,665 against 6,032 a week earlier. All this suggests that traders continue to bet on the strengthening of the pound, even in the face of the new Covid-19 strain, for which there is no vaccine yet. The demand for the pound is limited by quarantine measures in the UK, which will sooner or later be canceled after the infection stabilizes. Additional stimulus from the Bank of England, which economists will soon talk about, may also somewhat smooth out the upward trend in the pound.

Indicator signals:

Moving averages

Trading is carried out below 30 and 50 moving averages, which indicates a succeeding decline for the pair in the short term.

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

A breakout of the lower border of the indicator around 1.3545 will increase pressure on the pound. Growth will be limited to the area of the upper level of the indicator at 1.3636.

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.
• Non-commercial short 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.