17.06.202113:04 Forex Analysis & Reviews: GBP/USD: plan for the US session on June 17 (analysis of morning trades)

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

Buyers did everything possible to keep the pound from falling further. However, yesterday's Federal Reserve's decision on monetary policy and new forecasts continue to do their "dirty work." If you look at the 5-minute chart, you will see how the bulls are doing their best to protect the support of 1.3972 several times, forming a false breakout, which leads to the formation of a signal to buy the pound. If the market did not have such an evident bearish character, then the signal would have worked itself out. But no matter how hard the buyers tried, the bears still failed this level, continuing to push the pound lower. In the second half of the day, the technical picture has completely changed.

For buyers, a lot now depends on the data on the US economy today, which may lead to a larger fall in the pound. If the reports on the labor market do not please investors much, the bulls will protect the support of 1.3921, to which the pair is now gradually sliding. The formation of a false breakout will be a signal to open long positions in contrast to the sales we saw in the first half of the day. The main goal of buyers will be to regain control over the level of 1.3993. Only the consolidation and test of this area from top to bottom form an additional entry point into long positions in the expectation of an upward correction of the pound already to the maximum of 1.4047, where I recommend fixing the profit. There are also moving averages that play on the side of sellers. Suppose we do not see any bull activity in the area of 1.3921. In that case, it is best to buy GBP/USD immediately for a rebound from the next low of 1.3878, or even lower - in the area of 1.3839 in the expectation of an upward correction of 20-25 points within the day.

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

In the second half of the day, the bears will try to hold on to the level of 1.3921. A breakthrough in this area, together with another stunning data on the US labor market and a reduction in the number of applications for unemployment benefits for the previous week in the US, form a signal to open short positions, similar to those discussed above. In this case, we can expect a new wave of falling GBP/USD already in the lows of 1.3878 and 1.3839, where I recommend taking the profits. Suppose buyers manage to pull themselves together during the US session and try to rehabilitate themselves. In that case, I advise you to count on short positions only after forming a false breakout in the area of 1.3993. You can sell GBP/USD immediately for a rebound only from the next major resistance of 1.4047, based on a downward correction of 20-25 points within the day. There are also moving averages.

In the COT reports (Commitment of Traders) for June 8, a reduction in both long and short positions was recorded. However, this did not affect the positive delta negatively, but on the contrary, it even increased due to a larger reduction in the positions of sellers. It indicates the presence of a sufficiently large interest of buyers with each decline in the pound. The same type of statements by representatives of the Bank of England no longer work, and the market reacts rather weakly even to the speeches of Governor Andrew Bailey. Without real changes and adjustments to the bond-buying program by the central bank, it will be quite difficult for the British pound to get out of the side channel in which it has been for almost one month. An important point will be the full opening of the UK economy, which is scheduled for the 20th of this month. The spread of the Indian strain of coronavirus in the territory creates several obstacles to this, which affects the desire of investors to buy the British pound. The optimal scenario is to buy at every good decline in the British pound against the US dollar. The COT report shows that long non-profit positions fell from the level of 64,204 to 59,238, while short non-profit positions fell much more strongly from the level of 40,079 to the level of 31,524. As a result, the non-commercial net position increased from the level of 24,125 to the level of 27,714. The closing price of last week changed significantly and amounted to 1.41757 against 1.42270.

Signals of indicators:

Moving averages

Trading is below 30 and 50 daily averages, which indicates a continuation of the bear 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

A break of the lower limit of the indicator in the area of 1.3921 will lead to a new wave of falling of the pound. The growth will be limited by the upper level of the indicator in the area of 1.4097.

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 specific 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.