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In my morning forecast, I paid attention to the level of 1.2665 and planned to make trading decisions from there. Let's look at the 5-minute chart and analyze what happened. A decline and the formation of a false breakout near 1.2665 provided an excellent entry point for buying the pound, resulting in a 30-point increase in the pair. The technical picture has been revised for the second half of the day.
Data on the near absence of unemployment claims in the UK for November, along with a sharp increase in average earnings, supported the British pound, leading to GBP/USD strengthening and updating the daily high. However, buyers' momentum faded after this move.
In the second half of the day, significant US economic data will be released, including:
If strong US data emerges, pressure on the pound will return. Therefore, I will act near 1.2667, as I did in the first half of the day.
If GBP/USD declines and buyers show no activity around 1.2667, they will lose initiative. In this case, a false breakout near the next support at 1.2639 will be a suitable condition for opening long positions. I will open long positions immediately on a rebound from 1.2612, targeting a 30-35 point upward correction within the day.
If the pound rises following weak US data and continues the morning's upward trend, defending resistance at 1.2703 will be the priority for sellers.
If demand for the pound returns in the second half of the day after weak US data and sellers show no activity around 1.2703, buyers will gain a solid chance for another upward wave. In this case, bears will have no choice but to retreat to 1.2733 resistance.
The COT report for December 10 indicated a reduction in short positions and a rise in long positions. Overall, nothing changed in the market balance, as many traders adopted a wait-and-see approach ahead of the Bank of England's final meeting of the year.
The Bank of England's decision on interest rates remains uncertain, particularly with the latest GDP and inflation data complicating its position. This has led to cautious trading behavior.
Moving Averages:
Trading is occurring near the 30- and 50-day moving averages, indicating market uncertainty.
Note: The author uses the H1 chart for moving averages, which may differ from classic definitions on the D1 chart.
Bollinger Bands:
In case of a decline, the lower boundary of the indicator near 1.2665 will act as support.
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