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

I paid attention to the level of 1.2929 in my morning forecast and recommended opening short positions from it when the pair returns to this range. Everything happened exactly point to point. On the 5-minute chart, the bears waited for the resistance update of 1.2929 and actively returned to the market, forming several rather beautiful entry points. As a result, the first wave of downward movement brought more than 70 points of profit. Now it remains at the level of 1.2861, which will be actively fought for in the second half of the day.

The same important task for buyers of the pound is to protect the support of 1.2863, which was again tested after a sharp decline in the pound in the first half of the day. You should not rely on the formation of a false breakout at this level, thus, it is better not to rush to open long positions. I recommend waiting for the breakdown of this range, an unsuccessful downward movement of the pair, and only then, on the return and consolidation above 1.2863, possibly closer to the second half of the American session, open long positions with the aim of an upward correction to the resistance area of 1.2929. Only a break and consolidation above 1.2929 will indicate the advantage of buyers and form an additional entry point into long positions with the main goal of updating this week's maximum in the area of 1.3001, where I recommend fixing the profits. If the bulls do not show activity in the support area of 1.2863, it is best not to rush with purchases, but wait for the update of the larger minimum of 1.2807, where it is best to open long positions immediately for a rebound in the expectation of a correction of 30-40 points within the day.

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

The task for sellers of the pound is as simple as possible. To maintain market control, they need to lower GBP/USD to the level of 1.2863. A bottom-up test of this area forms a good entry point for short positions. In this case, the nearest target of the bears will be the area of 1.2807, the breakdown of which will increase the pressure on the pound, which will open a direct road to the minimum of 1.2749, where I recommend fixing the profits. In a scenario that the pair will rise again in the second half of the day in the resistance area of 1.2929, a little above which are moving averages and playing on the bears' side, we can once again sell GBP/USD immediately on a rebound to reduce the area week low of 1.2860. If there is no activity on the part of the bears at the first test of this area, it is best to postpone sales until the maximum update of 1.3001, based on a correction of 30-40 points within the day.

Let me remind you that the COT reports (Commitment of Traders) for September 29 recorded a sharp increase in short positions and a reduction in long ones, which affected the net position and led to its larger negative value. This once again confirms the desire of traders to build up short positions with any increase in the level in the expectation of uncertainty with Brexit and the prospects for the recovery of the British economy. The pressure on the pound will gradually increase as the second wave of coronavirus spreads. During the reporting week, there was an increase in short non-commercial positions from the level of 40,523 to the level of 51,961. Long non-commercial position decreased from 43,487 to the level 39,216. As a result, the non-commercial net position became negative and amounted to -12,745, against 2,964 a week earlier, which indicates a gradual return of the market to their control by major sellers.

Signals of indicators:

Moving averages

Trading is conducted below 30 and 50 daily averages, which keeps the advantage of sellers over buyers.

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.

Bollinger Bands

If the pound rises, the upper limit of the indicator in the area of 1.2929 will act as a resistance. A break of the lower limit of the indicator in the area of 1.2845 will lead to a new wave of decline in 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.