I focused on the level of 1.2227 when I made my morning forecast and suggested trading actions based on it. Let's take a look at the 5-minute chart and see what happened. At this level, the decline and the emergence of a false breakout provided a great buying opportunity for the pound, which at the time of writing had increased by more than 25 points. The technical situation has not changed for the second half of the day.

You require the following to open long positions on the GBP/USD:

It is clear that the bulls waited for the best opportunity to display themselves and did so at 1.2227. For the pound to reach a new monthly high, we now require weak data on the volume of home sales in the secondary market in the United States. If the data exceeds economists' expectations and pressure on the pair increases, I won't buy until after another false collapse at 1.2227 because there is no longer any special confidence in this price level. A breakthrough and a top-down test of this level will signal the opening of long positions with an exit at 1.2343. Only this will result in an update of 1.2294, a new monthly maximum. Without this level, it will be difficult for GBP/USD buyers to count on the continuation of a new upward trend, so only after going higher can we talk about growth. The breakout of 1.2343 and the top-to-bottom reversal test will pave the way for 1.2388, where I'll fix my profit. The 1.2450 area will be the farthest away target and will only be updated after extremely weak US data. If GBP/USD falls and there are no buyers at 1.2227, and the moving averages are on the bulls' side, the pound may return to sellers' control. If this occurs, I recommend that long positions be held until 1.2169. I recommend that you buy only if there is a false breakout. To correct 30-35 points within a day, it is possible to open long positions on the GBP/USD immediately for a rebound from 1.2115.

For opening short positions on the GBP/USD, you will need:

The sellers made an effort, but it was unsuccessful. But, as long as trade is below 1.2294, bears have the potential for a more substantial correction. Only a false collapse at 1.2294 in the afternoon creates a sell signal in anticipation of further declines in the pair to the closest support at 1.2227, for which an aggressive struggle is unlikely to play out similarly to the one I previously outlined. With the pair's growth from yesterday, a breakout and a reverse test from the bottom up of this range will provide an entry opportunity for sale with an update of the minimum of 1.2169, which will be a reasonably good downward correction. The area of 1.2115 will be a further target, where I'll set profits. Buyers will be able to maintain market control due to the possibility of GBP/USD growth and the absence of bears around 1.2294 during the American session, which will cause a move of GBP/USD to the highest area of 1.2343. A false breakout at this level creates an entry point into short positions based on the decline of the pound. If there isn't any activity there, I suggest selling GBP/USD at 1.2388 in the hopes that the pair will go back down by 30-35 points over the day.

Both long and short holdings increased in the COT report (Commitment of Traders) for March 7. It should be understood that these data are irrelevant at this time because statistics are just now starting to catch up following the CFTC cyberattack, making the data from two weeks ago not particularly useful. I'll hold off until new reports are released and rely on more recent data. In addition to the Fed meeting this week, the Bank of England will also meet, and significant decisions regarding interest rates will be made at that meeting. Given that the current effort to combat inflation is not yet yielding many positive results, it is anticipated that the regulator may decide to sustain aggressive rates of growth in the cost of borrowing. We can anticipate that the pound will continue to increase and reach new monthly highs if the Fed changes its stance but the Bank of England does not. According to the most recent COT data, long non-commercial positions increased by 1,227 to 66,513 while short non-commercial positions increased by 7,549 to 49,111, bringing the non-commercial net position's negative value down to -17,141 from -21,416 the previous week. The weekly ending price fell from 1.2112 to 1.1830.

Signals from indicators

Moving Averages

Trade is taking place just slightly above the 30 and 50-day moving averages, which suggests that the pound will likely continue to rise.

Notably, the author considers the time and prices of moving averages on the hourly chart H1 and departs from the standard definition of the traditional daily moving averages on the daily chart D1.

Bands by Bollinger

The indicator's upper bound, or approximately 1.2290, will serve as resistance in the event of growth.

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 use the futures market for speculative purposes and to 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.