To open long positions on GBPUSD, you need:
Even in my morning forecast, I paid attention to sales from the level of 1.3072, but we did not reach it in the first half of the day, so there was no signal to open short positions there. A break below the level of 1.2997 also failed to form a more distinct entry point, which led to me missing this trade as well.
At the moment, the technical picture is far from in favor of the pound buyers. The lack of news on Brexit seems to be weighing on buyers, as the longer the situation remains unknown, the more likely it is that there will be no compromise between the parties. All that the bulls can now count on is a return of the resistance of 1.2997 since only a consolidation above this level will lead to the formation of a buy signal that can return GBP/USD to the resistance area of 1.3072, where I recommend fixing profits. If the pressure on the pound persists against the background of the lack of news and important fundamental statistics, I recommend opening long positions only from a large local minimum of 1.2919, where purchases can be made immediately for a rebound based on a correction of 20-30 points within the day.
To open short positions on GBPUSD, you need to:
Bears are now aimed at reducing the GBP/USD to the support area of 1.2919, and while trading is conducted in the middle of the channel, there will be no reference points for entering short positions. Only an upward correction and the formation of a false breakout in the resistance area of 1.2997 will be a signal to sell the pound in the continuation of the current trend. Negative news on Brexit may increase pressure on the pair, which will lead to a breakout and consolidation below the support of 1.2919. In this case, the weekly target will be at least 1.2865. In the scenario of growth of GBP/USD above the resistance of 1.2997 in the second half of the day, I recommend postponing sales until the test of the maximum of 1.3072 in the expectation of a correction of 20-30 points.
Let me remind you that in the COT reports (Commitment of Traders) for October 20, there was a reduction in short and a sharp increase in long positions. Long non-commercial positions increased from the level of 36,195 to the level of 39,836. At the same time, non-commercial short positions dropped from the level of 45,997 to the level of 41,836. As a result, the negative value of the non-commercial net position slightly increased to -2,000 against -9,802 a week earlier, which indicates that sellers of the British pound remain in control and have a minimal advantage in the current situation.
Signals of indicators:
Trading is below 30 and 50 daily averages, which indicates a resumption of the bear market.
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.
In the case of an upward correction, the average border of the indicator around 1.3030 will act as a resistance, from which you can sell the pound immediately for a rebound.
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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