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

In the first half of the day, several signals were formed to enter the market. Let's look at the 5-minute chart and analyze all the entry points. In my morning forecast, I advised you to pay attention to the level of 1.4149 and make a decision from it. The formation of a false breakout at the beginning of the European session led to forming a signal to open long positions. After a while, after an excellent report on activity in the UK services sector, the pound managed to quickly recover to the resistance area of 1.4188, which brought about 40 points of profit.

Now the main task of buyers will be to consolidate above the range of 1.4188 and hold it in the second half of the day. The longer we stay above this level, the more likely it will continue the upward trend in the pound. The formation of a false breakout after the data on the US economy will lead to another signal to enter long positions, which will open a direct road to the maximum of 1.4241, where I recommend taking the profits. If the pressure on the pound returns in the afternoon and the bulls miss the level of 1.4188, it is best not to rush to buy. The best option is to wait for the release of data on the US labor market and watch the reaction of traders to them. If the pressure on the GBP/USD increases, I advise you to wait for a second update of the minimum in the area of 1.4149. You can buy the pound immediately for a rebound with the expectation of an upward correction of 20-25 points within the day. The next significant support is in the area of 1.4112.

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

The main task of the bears for the second half of the day will be to protect the resistance of 1.4188. Returning to this level and testing it from the reverse side will lead to the formation of a signal for opening short positions in the expectation of a downward movement of GBP/USD to the morning support of 1.4149, where I recommend taking the profits. A more distant target will be the area of 1.4112. However, it will be available only in the case of very strong data from ADP on the US labor market and a sharp jump in activity in the service sector to new historical highs. Suppose this does not happen, and the growth of the pound continues during the US session. In that case, it is best to take your time with sales: I advise you to postpone short positions until the update of the maximum of 1.4241, from which you can sell GBP/USD immediately on the rebound in the expectation of a downward correction of 20-25 points within the day.

Let me remind you that the COT reports (Commitment of Traders) for May 25 recorded a reduction in short positions and a sharp increase in long ones. Recent statements by the Bank of England representatives that now is the time to think about curtailing support measures and raising interest rates surprised many traders. However, this returned the British pound's demand, which managed to pull up to annual highs. The pound was also supported by the news that from June 21 this year, the UK economy will be fully open, and all restrictive measures due to COVID will be canceled. It will be an excellent bullish boost for retail sales and inflation. Against this background, the upward potential of the pound will remain quite high. It would be best if you waited for a little while. The COT report indicates that long non-profit positions increased from 63,027 to the level of 64,193. However, short non-profit positions sharply decreased from the level of 38,127 to the level of 33,534, which indicates profit-taking and the departure of sellers from the market after unsuccessful attempts to turn the market to their side. It is another plus in the piggy bank of buyers of the pound and those who believe in continuing the medium-term upward trend. As a result, the non-profit net position increased from 24,900 to 30,659. The closing price of last week did not change significantly and amounted to 1.41553 against 1.41479.

Signals of indicators:

Moving averages

Trading is conducted above 30 and 50 daily averages, which indicates an attempt by buyers to turn the market to their side.

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 above 1.4188 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.