To open long positions on GBP/USD, you need:
Yesterday's data on the US labor market quickly brought buyers of the pound to their senses, who managed to form a fairly powerful upward correction in the pair, coming close and testing the resistance of 1.2528, where a fairly good sell signal was formed yesterday. I described it in more detail in my forecast for the second half of the day. If you look at the 5-minute chart, you will see how the bulls failed to break above the resistance of 1.2528, and a false breakout on the volume of this level after the data on the unemployment rate in the US led to a sell-off of GBP/USD to the support area of 1.2451, where all activity stopped. At the moment, while trading is conducted above the area of 1.2451, we can expect the pound to continue growing to a high of 1.2528, consolidating above which will necessarily lead the pair to a new resistance area of 1.2607, where I recommend taking profits. In the scenario of a decline in GBP/USD in the first half of the day, forming a false breakout at the level of 1.2451 will be a signal to open long positions. This may happen after the release of good reports on activity in the UK services sector, which plays a fairly important role for the economy. If there is no activity from the bulls in this range, it is best to postpone purchases until we update a larger area of 1.2386, from which all the growth occurred yesterday. Let me remind you that the Commitment of Traders (COT) report for June 23 recorded another increase in short positions, which no longer reflects the current situation on the market. The new report will not be available until next Monday. During the week, there was an increase in short non-commercial positions from the level of 45,376 to the level of 48,170. During this time, long non-commercial positions rose from the level of 29,379 to the level of 29,654. As a result, the non-commercial net position increased its negative value to -18,516, against -15,998, which indicates that pressure in the market remains after the unsuccessful attempt by the bulls to reverse the downward trend.
To open short positions on GBP/USD, you need:
Sellers of the pound completely coped with their task and managed to protect the resistance of 1.2528, forming a fairly good sell signal from there. At the moment, the bears need to consolidate below the level of 1.2451, which will be a signal to open short positions while expecting the downward correction to resume to the area of a low of 1.2386, where I recommend taking profits. In case GBP/USD grows further, it is best to postpone sales until a false breakout forms at the level of 1.2528. But you can safely open short positions immediately for a rebound after testing the high of 1.2607, counting on a correction of 30-40 points within the day. However, you should remember that the US is celebrating Independence Day today, and so US markets will be closed in the afternoon.
Trading is conducted in the area of 30 and 50 moving averages, which indicates the uncertainty of traders with a further outlook.
Note: the period and prices of 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).
The downward movement will continue only after the breakout of the lower border of the indicator in the area of 1.2435. Growth will be limited to the upper level at 1.2520.
Description of indicators
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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