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

In my morning forecast, I paid attention to the level of 1.4108 and advised us to enter the market. Let's look at the 5-minute chart and talk about what happened. The first attempt to get above the resistance of 1.4108 was unsuccessful, and the bulls failed to gain a foothold there. From the second time, there was only a test of this level from the bottom up, which confirmed the correctness of the entry point. For the third time, we collected the stop orders of those who sold well from 1.4108 and have already pulled everything to breakeven and again returned under 1.4108, counting on a more powerful fall of the pair in the second half of the day.

From a technical point of view, only the levels changed for the second half of the day, and the strategy remained the same. Buyers still need to break above the resistance of 1.4114, which was revised from the level of 1.4108. The breakdown and test of this area from top to bottom will lead to the opening of new long positions in the continuation of the upward trend and with the immediate goal of reaching the maximum of 1.4163, where I recommend taking the profit. The breakout of this range will depend on the fundamentals this week. Today's speech by the Bank of England, Andy Haldane, did not affect the market in any way. The growth was limited by the divergence on the MACD indicator, which is almost entirely played out by the current moment. I paid attention to this point in the morning forecast. If a further decline in the pair, I do not recommend rushing to buy: the optimal scenario will be long positions when a false breakout is formed in the support area of 1.4058, just above which the moving averages play on the side of the pound buyers. It is possible to open long positions immediately for a rebound only from a larger low in the area of 1.4007 with the expectation of an upward correction of 25-30 points within the day.

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

As long as trading is conducted below the resistance of 1.4114, the pressure on the pair will remain. If in the second half of the day we see the pound's growth again, the best option for opening short positions will be the formation of a false breakout in the area of the same resistance. This forms an additional entry point to short positions, of which there was a sufficient number today. The main goal of the bears is to reduce the GBP/USD to the support of 1.4058, where I recommend taking the profits. If sellers manage to break below this range, and this will happen only under the scenario of excellent data on the US economy, then only its reverse test from the bottom up will form a convenient entry point into short positions, already counting on the pair's return to the area of last week's low in the area of 1.4007. Suppose there is no bear activity in the area of 1.4114. In that case, it is best to postpone short positions until the next high of 1.4163 is updated, from where you can open short positions immediately for a rebound in the expectation of a downward correction of 20-25 points within the day. The next major resistance is seen around 1.4201.

Let me remind you that the COT reports (Commitment of Traders) for May 4 recorded a reduction in long positions and increased short ones. However, the data does not consider Friday's market changes, when the British pound showed a significant increase. Last week, we all followed the decision of the Bank of England on interest rates, so traders feared for the further growth of the pound, increasing short positions. Keeping monetary policy unchanged limited the upward potential of the pound. Still, hints from committee members that it was time to think about curtailing stimulus programs breathed new strength into the pound's buyers. Disappointing data on the US labor market will continue to put pressure on the US dollar for a long time at any opportunity. Therefore, the trend for the strengthening of the British pound will continue. The prospect of a recovery in the UK economy in the summer, when all quarantine restrictions will be lifted, also causes a lot of optimism and helps buyers of the pound find excuses to build up positions. The COT report shows that long non-profit positions have declined from 59,917 to the level of 52,262. At the same time, short non-profit positions rose from the level of 30,699 to the level of 32,414, resulting in a non-profit net position falling to the level of 19,848 from the level of 29,218 a week earlier. But the closing price of last week rose to the level of 1.39033 against 1.38947.

Signals of indicators:

Moving averages

Trading is just above 30 and 50 daily averages, indicating uncertainty with the direction within the day.

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 upper limit of the indicator in the area of 1.4110 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 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.