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21.01.202115:46 Analytische Bewertungen Forex: GBP/USD: plan for the US session on January 21 (analysis of morning trades).

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

It was not possible to wait for the return and the formation of a false breakout at the level of 1.3669 in the first half of the day, as well as to enter the market at these attractive prices. After rising to a new resistance of 1.3716, the bulls tried to gain a foothold above this range, and they succeeded. The reverse test of the level of 1.3716 from top to bottom formed a good signal in the continuation of the upward trend.

Exchange Rates 21.01.2021 analysis

However, as we can see on the chart, so far there has been no active growth from the level of 1.3716, which may lead to the formation of a major downward correction, similar to yesterday. In the scenario of a breakout and consolidation of GBP/USD below 1.3716, I recommend exiting long positions and waiting for the pound to decline to the area of the larger level of 1.3669, from where you can open long positions immediately on a rebound to recover by 20-25 points within the day. There are also moving averages that play on the side of buyers of the pound. If the bulls continue to push the pair up, there may be a breakout and a consolidation above the resistance of 1.3750, to which we fell just 5 points short today. The test of this area from top to bottom forms another entry point into long positions with the main goal of reaching the maximum of 1.3803, where I recommend taking the profit.

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

After the next update of the annual maximum, the bears lost all hope of building a downward correction today. Therefore, only a consolidation below the support of 1.3716 and a test of it on the reverse side will lead to the formation of a signal to open short positions to reduce the pound to the support area of 1.3669, where I recommend taking the profits. The longer-range target will be at least 1.3624, however, it will be very difficult to reach it today. If the bulls continue to push the pair up, then I recommend looking at short positions only after a false breakdown in the area of 1.3750, and I recommend selling GBP/USD immediately on a rebound from the maximum of 1.3803 with the aim of a downward correction of 20-25 points within the day.

Exchange Rates 21.01.2021 analysis

Let me remind you that in the COT reports (Commitment of Traders) for January 12, the growth of long and short positions was recorded, but the first ones turned out to be more, which led to an increase in the delta. Long non-commercial positions increased from 35,526 to 47,935. At the same time, short non-commercial positions increased from 31,861 to 34,993. It can be seen that there were much fewer sellers than new buyers. As a result, the non-profit net position increased and amounted to 12,942, against 3,665 a week earlier. All this suggests that traders continue to bet on the strengthening of the pound even in the face of a new strain of COVID-19, for which there is no vaccine yet. The demand for the pound is limited by quarantine measures in the UK, which will be lifted sooner or later after the situation with infections has stabilized. The recent failure of the Bank of England from the introduction of negative interest rates and the pound earlier this year – all of it brought many large and medium customers to rely on the continuation of the bull market this spring.

Signals of indicators:

Moving averages

Trading is conducted above 30 and 50 daily averages, which indicates a further upward movement of the pound.

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

In the case of a decline in the pair, the lower limit of the indicator in the area of 1.3624 will provide support.

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 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 the short and long positions of non-commercial traders.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

Viele Grüße,
Analytiker: Miroslaw Bawulski
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