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

In the first half of the day, a sell signal was formed for the pound from the level of 1.3917, which I paid attention to in my morning forecast. Let's look at the chart and analyze the entry points to short positions. It is clear that after an unsuccessful update of local lows, buyers of the pound quickly return the market to the area of a large resistance of 1.3917, where a false breakdown is formed. At the time of writing, there was no particular activity in this range on the part of the bears. Thus, the upward movement may continue in the case of insufficient data on the US economy. The report on the labor market is the main focus today in the second half of the day.

From a technical point of view, nothing much has changed. I did not revise the next levels, and a lot depends on how the pair will behave further in the resistance area of 1.3917. A break and a test of this level from top to bottom form a new signal to buy the pound in the expectation of continuing the pair's growth and updating the maximum of 1.3970, where I recommend taking the profits. A more distant target will be the area of 1.4015. However, it will be available only in the case of insufficient data on the US economy. If the pressure on GBP/USD returns in the second half of the day, and the bears push the pair to the support of 1.3862, I recommend postponing purchases until a false breakout is formed. You can open long positions immediately on a rebound from a larger local low of 1.3811, based on an upward correction of 20-25 points within the day.

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

As long as trading is conducted below the resistance of 1.3917, the pressure on the pound will remain. The nearest target of buyers is the minimum of 1.3862, which we did not reach today in the first half of the day. Only a real break in this area with a test from the bottom up on the volume will form an additional entry point into short positions already expecting a return to the minimum of 1.3810, where I recommend fixing the profit. If we see the growth of the pound during the US session above the resistance of 1.3917, and the US data will be worse than economists – it is best to postpone short positions until the update of a large local high in the area of 1.3970, based on a downward correction of 20-25 points within the day.

Let me remind you that the COT reports (Commitment of Traders) for April 27 recorded a reduction in both long and short positions, while the total non-commercial net position increased. How it happened - let's figure it out. Last week, we did not see important fundamental statistics for the UK, so all the attention was on the European Parliament's vote on Brexit, the results of which supported the pound. Also, the British prime minister's speeches and the possible earlier lifting of all quarantine restrictions on the territory of Britain allowed buyers of the pound to stick to their scenario for strengthening the pair. All this will continue to contribute to growth in the medium term, so I recommend betting on further strengthening against the US dollar. Any good correction of the pair down is another reason to think about buying the pound, as the prospect of a recovery in the UK economy in the summer period causes a lot of optimism. The COT report shows that long non-profit positions fell from 61,053 to the level of 59,917. At the same time, short non-profit positions fell from the level of 35,875 to the level of 30,699, as a result of which the non-profit net position rose to the level of 29,218 against the level of 25,178 a week earlier. Closing short positions once again indicate the fact that the upward potential of the pound is simply huge. Last week's closing price also fell slightly to 1.38947 against 1.39915.

Signals of indicators:

Moving averages

Trading is conducted above 30 and 50 daily averages. However, this does not affect the market in any way.

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 1.3875 will lead to a new wave of decline in the pound. A break of the upper limit in the area of 1.3917 will lead to a new wave of growth of the pound.

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.