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19.01.202113:34 Forex Analysis & Reviews: GBP/USD: plan for the American session on January 19 (analysis of morning deals)

To open long positions on GBPUSD, you need:

In my morning forecast, I paid attention to the level of 1.3611 and recommended opening positions from it if several conditions are met. Let's look at the 5-minute graph and analyze the signals that were generated. Bears actively defended the area of 1.3611 several times, however, it was not possible to wait for the formation of a false breakout there, as well as the formation of the correct entry point into short positions. Now that the bulls have reached the breakout level of 1.3611, all they need is to gain a foothold higher.

Exchange Rates 19.01.2021 analysis

Buyers need a verification test of the area of 1.3611 from top to bottom or a fairly long trade above this level. All this forms a good signal to open long positions, which will be aimed at updating the resistance of 1.3658, where I recommend fixing the profits. If the bulls are more active in the second half of the day, it is possible to update the annual maximum in the area of 1.3701. In the scenario of a return of GBP/USD under the level of 1.3611, it is best not to rush into purchases. The optimal scenario would be a decline in the pair to the support area of 1.3571, where the moving averages, which are on the side of the bulls, also pass. The formation of a false breakout will be an excellent point to enter the market. I recommend opening long positions in the pound immediately on the rebound from the low of 1.3531 with the aim of an upward correction of 25-30 points within the day.

To open short positions on GBPUSD, you need to:

Bears need to quickly regain control of the level of 1.3611, which they missed in the first half of the day. Only a return and a test of this area from the bottom up will form a signal to open short positions, which will lead to a decrease in GBP/USD to the area of the first support level of 1.3571, where I recommend taking the profits. More persistent sellers will expect to update the minimum of 1.3531, however, it will be quite difficult to do this without the appearance of negative news on the coronavirus or fundamental statistics, which now plays a secondary role. In the scenario of further growth of the pound, it is best to postpone sales until the update of the maximum of 1.3658 or sell the pair immediately on the rebound from the area of 1.3701 in the expectation of a downward correction of 20-30 points within the day.

Exchange Rates 19.01.2021 analysis

Let me remind you that COT reports (Commitment of Traders) for January 12 recorded an increase in long and short positions, but the first was more, which led to an increase in the delta. Long non-commercial positions increased from 35,526 to 47,935. At the same time, short non-commercial positions increased from 31,861 to 34,993. It can be seen that there were much fewer sellers than new buyers. As a result, the non-profit net position increased and amounted to 12,942, against 3,665 a week earlier. All this suggests that traders continue to bet on the strengthening of the pound even in the face of a new strain of COVID-19, for which there is no vaccine yet. The demand for the pound is limited by quarantine measures in the UK, which will be canceled sooner or later after the situation with infections has stabilized. The recent failure of the Bank of England from the introduction of negative interest rates and the pound earlier this year – brought to market many large and medium customers relying on the continuation of the bull market this spring.

Signals of indicators:

Moving averages

Trading is above 30 and 50 daily averages, which indicates a further upward movement of the pound.

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

A break of the upper limit of the indicator in the area of 1.3615 will lead to a new upward wave of the pair. In the event of a decline, the lower border around 1.3571 will provide support.

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.

*Prezentowana analiza rynku ma charakter informacyjny i nie jest przewodnikiem po transakcji.

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