22.07.202417:20 Forex Analysis & Reviews: GBP/USD: Trading Plan for the US Session on July 22nd (Analysis of Morning Trades). Pound Fails to Reach 1.2945

I focused on the 1.2945 level in my morning forecast and planned to make market entry decisions based on this level. Let's look at the 5-minute chart to see what happened. The rise occurred, but it missed the 1.2945 test by just a couple of points, preventing entry into short positions. Given this, the technical picture for the second half of the day has been partially revised.

To Open Long Positions on GBP/USD:

The absence of US data will play a key role in market volatility, which is unlikely to be high today. In this context, trading within the channel I will use is preferable. In the event of a decline in the pair, only a false breakout formation around the new support at 1.2903 will provide an entry point for long positions aiming to update the maximum at 1.2943, around which the pair is currently trading. A breakout and retest from top to bottom of this range will restore the pound's upward potential, leading to an entry point for long positions with the possibility of testing 1.2974. The furthest target will be the area of 1.3009, where I will take profit. In the scenario of GBP/USD falling and a lack of bullish activity at 1.2903 in the second half of the day, which is also unlikely, pressure on the pair will increase. This will also lead to a decline and update the next support at 1.2870, significantly harming the bull market. Forming a false breakout will be a suitable condition for opening long positions. I plan to buy GBP/USD immediately on a rebound from the minimum of 1.2849, with a target of an upward correction of 30-35 points within the day.

To Open Short Positions on GBP/USD:

Sellers showed themselves a little earlier than I expected, but this did not affect the strategy. In the event of another upward surge, only after forming a false breakout can it be considered a suitable option for opening short positions to continue the downward correction, aiming to reduce support at 1.2903 – last Friday's low. A breakout and retest from the bottom to the top of this range will hit buyers' positions, leading to stop order triggers and opening the way to 1.2870. The furthest target will be the area of 1.2849, where I will take profit. Testing this level will severely harm the pound's upward potential. In the case of GBP/USD rising and a lack of bearish activity at 1.2943 in the second half of the day, buyers will have a chance for further growth. In this case, I will postpone sales until a false breakout at 1.2974. If there is no downward movement, I will sell GBP/USD immediately on a rebound from 1.3009, but only targeting a downward correction of 30-35 points within the day.

The COT Report (Commitment of Traders):

The COT report for July 9th showed an increase in long positions and a decrease in short positions. The pound is overbought, but the bull market for it has not disappeared. This week's optimal strategy will be buying on corrections, as there are no grounds for breaking the monthly maximum yet. Pay attention to US retail sales data and the next comments from British and American politicians. Only direct hints at rate cuts in the US with specific dates will lead to the development of a bull market for the pound. The latest COT report indicates that long non-commercial positions increased by 4,206 to 106,753, while short non-commercial positions fell by 13,787 to 44,712. As a result, the spread between long and short positions increased by 717.

Indicator Signals:

Moving Averages:

Trading is conducted around the 30-day and 50-day moving averages, indicating a sideways market.

Note: The author considers the period and prices of moving averages on the H1 hourly chart, which differs from the general definition of classical daily moving averages on the D1 daily chart.

Bollinger Bands:

In the case of a decline, the indicator's lower boundary, around 1.2903, will act as support.

Indicator Descriptions:

• Moving Average (determines the current trend by smoothing volatility and noise). Period 50. Marked in yellow on the chart.
• Moving Average (determines the current trend by smoothing volatility and noise). Period 30. Marked in green on the chart.
• MACD Indicator (Moving Average Convergence/Divergence). Fast EMA period 12. Slow EMA period 26. SMA period 9.
• Bollinger Bands. Period 20.
• Non-commercial traders - speculators, such as individual traders, hedge funds, and large institutions, using the futures market for speculative purposes and meeting certain requirements.

• Long non-commercial positions represent the total long open positions of non-commercial traders.
• Short non-commercial positions represent the total short open positions of non-commercial traders.
• Total non-commercial net position is the difference between non-commercial traders' short and long positions.