02.09.202113:25 Forex Analysis & Reviews: GBP/USD: plan for the US session on September 2 (analysis of morning deals). The pound is marking time around yesterday's resistance at 1.3791

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

There was no significant activity in the GBP/USD pair in the first half of the day. However, at the time of writing, a rather interesting signal is being formed, leading to the formation of an entry point into short positions. Let's look at the 5-minute chart and figure it out. It is visible how the bulls seem to have got out and clung to the level of 1.3791, but their activity has decreased above this range, which puts the further growth of GBP/USD at serious risk. The main task of buyers for the second half of the day will be to protect this range, but it is possible to open long positions from it only if a false breakdown is formed with a return to the level of 1.3791. Only after that will it be possible to count on weak data on the US labor market and another wave of growth of GBP/USD to a new weekly maximum of 1.3826. A test of this level will indicate the pair's exit from the side channel and the continuation of the upward trend that traders are waiting for. A more distant target will be the level of 1.3868, where I recommend fixing the profits. If the bulls will not offer anything in the area of 1.3791, and the pair will gradually slide under this level, it is best not to rush to buy. The optimal scenario would be forming a false breakdown in the area of 1.3758, just above which the moving averages are playing on the buyers' side. If no people are willing to increase long positions there – the best option will be long positions from the minimum of 1.3731, which is the lower limit of the current side channel. You can buy GBP/USD immediately for a rebound in the area of the minimum of 1.3694 with the aim of an upward correction of 15-20 points within the day.

Exchange Rates 02.09.2021 analysis

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

The initial task of the bears is to return the level of 1.3791 under control. A breakout and a test of this area from the bottom up will form the first entry point into short positions, which will push GBP/USD lower - to the middle of the side channel 1.3758. The breakout of this area will fall on the stop orders of the bulls, so the pair may fall to a minimum of 1.3731, where I recommend fixing the profits. The longer-term goal will be the support of 1.3694, but this is only after the markets begin to believe in the Federal Reserve System and a change in its attitude to monetary policy. Any statements made by representatives of the central bank can persuade traders to side with sellers. In case of further growth of GBP/USD, I advise you to open short positions from there only if a false breakdown is formed in the area of a new resistance of 1.3826. You can sell GBP/USD immediately on a rebound from a new weekly high in the area of 1.3868, counting on a downward correction of 25-30 points within the day.

Exchange Rates 02.09.2021 analysis

The COT reports (Commitment of Traders) for August 24 recorded a reduction in long positions and a very large increase in short ones, which significantly affected the delta. However, all these changes do not consider the Friday speech of the Chairman of the Federal Reserve System, Jerome Powell. His statements broke any hope of investors for further strengthening of the US dollar this fall. The positions of buyers of the pound have changed a lot now, and I do not recommend paying serious attention to the current COT report. Given that we have not seen any important fundamental statistics for the UK over the past week, it is obvious that buyers of the pound will seize any opportunity to build up long positions. However, the fact that representatives of the Bank of England are in no hurry to talk about changing monetary policy affects the activity of traders. I advise you to continue to adhere to buying the British pound with any good decline. The lower the pound falls, the more active buyers of risky assets will begin to show themselves, betting on real changes in the monetary policy of the Bank of England in the future. The COT report indicates that long non-commercial positions fell from the level of 41,898 to the level of 39,489.

In contrast, short non-commercial positions jumped from the level of 37,247 to the level of 56,234, which indicates a preponderance towards the pound sellers, but in fact, this is not the case now. As a result, the non-commercial net position decreased to -16,746, compared to 4,651 a week earlier. The closing price of last week fell to the level of 1.3723 against 1.3840.

Signals of indicators:

Moving averages

Trading is conducted above 30 and 50 daily averages, which indicates that the bulls are trying to break through above the local highs.

Note: The author considers the period and prices of moving averages 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 1.3758 will increase the pressure on the pair. A break of the upper limit in the area of 1.3795 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.

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

Miroslaw Bawulski,
Analytical expert of InstaForex
© 2007-2022
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