05.08.202108:55 Forex-elemzések és áttekintések: GBP/USD: plan for the European session on August 5. COT reports. Pressure on the pound will return after the meeting of the Bank of England

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

Yesterday's data on activity in the UK services sector spoiled the bulls' plans for further growth of the pound, which would still be limited due to today's Bank of England meeting on monetary policy. In yesterday's forecast, I paid attention to resistance at 1.3935 and advised you to make decisions on entering the market. Let's take a look at the 5 minute chart and break down the entry points. It can be clearly seen how the bulls did not have enough strength to stay above the 1.3935 range, where a signal to open short positions was formed. However, the downward movement was only 20 points, after which the pair grew a little more to the resistance area of 1.3951, from which, on a false breakout, I advised to open short positions in my afternoon forecast. There, the downward movement was more serious and brought about 50 points of profit. Buying at the end of the day from the level of 1.3902 after a false breakout did not bring much success, since I did not wait for an upward correction. Today we have a passing meeting of the Bank of England on monetary policy, after which I think the pressure on the British pound will return, provided, of course, that the central bank does not tell us anything new. There are no other important fundamental reports today, so the volatility of the pair in the first half of the day promises to be quite low. The bulls' primary task is to regain control over the resistance at 1.3902, which they missed during yesterday's US session. Only a test of this range from top to bottom can create a signal to open long positions in hopes of growth to yesterday's high in the 1.3951 area. It will be possible to talk about the pound's recovery to monthly highs only if the Bank of England reveals its cards at the beginning of winding up the bond purchase program. Otherwise, the demand for the pound is unlikely to remain as strong as before. A breakthrough of 1.3951 and a test of this level from top to bottom will lead to a renewal of the 1.3995 high with a subsequent exit at 1.4059 and 1.4097. The next target is the resistance at 1.4128, where I recommend taking profits. In case the pound falls, the bulls will focus on the support at 1.3846. Forming a false breakout there creates a good entry point into long positions. If at the end of the meeting the bulls are not active there, and the pound continues to fall, long positions can be opened only at the lows of 1.3807 and 1.3708, counting on a rebound of 15-20 points within the day.

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

The initial task of the bears is to protect the resistance at 1.3902. Much will depend on the market's reaction to the Bank of England's decision. Forming a false breakout in the area of 1.3902 will return pressure to the pound, which will form the first signal to open short positions in hopes that the pair would fall to support 1.3846. The breakdown of this level will depend on the statements made by Bank of England Governor Andrew Bailey. If the rhetoric of the central banker remains soft, we can expect GBP/USD to sharply move down. The test from the bottom up at 1.3846 will hit the stop orders of the bulls, which will push the pound even lower to the support at 1.3807, where it is worth considering taking profit. The next target is the area of 1.3768. If the bears are not active in the 1.3902 area, I advise you to postpone short positions until the next major resistance at 1.3951, or open short positions in GBP/USD immediately after a rebound from a new local high in the 1.3995 area, counting on a downward correction of 25-30 points within the day.

The Commitment of Traders (COT) reports for July 27 showed that long positions decreased, but sellers also did not insist and partially reduced their position volume. The pound's growth throughout the week allowed the GBPUSD pair to return to monthly highs, but failed to settle above. The panic after the lifting of all quarantine restrictions in the UK has receded and now the main focus this week will be on the Bank of England (BoE) meeting on monetary policy. The European Central Bank and the Federal Reserve did not change anything. Most likely, the BoE will do the same. Before abandoning stimulus measures, members of the BoE committee will probably wait for accurate data on how things are in the labor market. It is expected that a large-scale government program to support the labor market will be completed in September this year, which may force the central bank to take a longer wait-and-see attitude, since the central bank has not yet experienced any particular problems with inflationary pressure. If the representatives of the BoE start talking more and more about plans to reduce the bond purchase program, this will provide significant support to the pound. I advise you to stick to the strategy of buying the pair every time it drops significantly, as the major players do. The COT report indicated that long non-commercial positions fell from 44,223 to 41,194, while short non-commercial positions fell from 47,720 to 46,878, indicating a cautious approach to selling at current highs. As a result, the non-commercial net position remained negative and amounted to -5,684 against -3,496 a week earlier. Last week's closing price jumped from 1.3668 to 1.3826.

Indicator signals:

Trading is carried out just below the 30 and 50 moving averages, which indicates the sideways nature of the market in the short term.

Moving averages

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

If the pair grows, the upper border of the indicator at 1.3940 will act as a resistance. A break of the lower border at 1.3865 will increase pressure on the pound.

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.