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

In my morning forecast, I paid attention to the level of 1.3769 and recommended that you decide to enter the market from it. Let's look at the 5-minute chart and talk about what happened. It is seen how in the first half of the day, the bears protect the resistance of 1.3769, forming a signal from it to open short positions, which leads to a drop of the pair by more than 30 points. However, it was not possible to update the local lows, which led to a repeat test of 1.3769 and its breakdown. No other signals were formed to enter the market.

In the second half of the day, buyers will need to think carefully about protecting the support of 1.3769, above which they managed to break through today. In the case of good fundamental statistics on the real estate market in the United States, only the formation of a false breakdown in this range will lead to an excellent entry point into long positions in continuation of the bullish trend observed middle of last week. In this case, the target of buyers will be the resistance of 1.3819. The reverse test of this level from top to bottom, together with weak data on the US economy, form an additional signal to open long positions in the expectation of updating the maximum of 1.3859, where I recommend fixing the profits. The next target will be the area of 1.3896. If the bears are more persistent and buyers do not show any activity in the support area of 1.3769 in the second half of the day, the optimal scenario will be purchases when a false breakdown is formed in the support area of 1.3722. You can buy the pound immediately for a rebound based on an upward correction of 25-30 points within the day only from the minimum of 1.3672.

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

The initial task of the bears is now to protect the resistance of 1.3819, which the sellers are targeting today. Data on the US economy may disappoint buyers of the pound, so its growth to this level in the second half of the day is not excluded. But only the formation of a false breakdown will lead to the formation of a sell signal, counting on the pair's decline to the support of 1.3769, which served as a resistance even in the morning. A breakdown and a reverse test of this level from the bottom up will lead to forming a new entry point into short positions. The demolition of buyers' stop orders below will collapse GBP/USD to a minimum of 1.3722, where I recommend fixing the profits. In the absence of active actions of sellers in the area of 1.3819, I recommend postponing sales until the test of a larger maximum of 1.3859. It is also possible to sell GBP/USD immediately on a rebound from 1.3896 based on a downward correction of 25-30 points within the day.

The COT reports (Commitment of Traders) for July 13 recorded a sharp reduction in long positions and a slight increase in short ones. It suggests that inflation in the United States of America still affected the mood of buyers of the pound in a negative direction. The fact that the Bank of England representatives have recently been reluctant to talk about plans to reduce the bond purchase program once again proves their cautious position on this issue. On July 19 of this year, the UK government completely lifted all quarantine restrictions. However, according to the latest figures on the incidence of a new coronavirus "delta" in the country, this is not for long. Undoubtedly, after each major movement of the GBP/USD down, traders show special interest since the central bank will start talking about curtailing measures to support the economy sooner or later, positively impacting the British pound and leading to its growth. But while there has not been a serious exit beyond the target level of inflation in the UK, it is unlikely that the Bank of England will rush to change its policy. Despite this, the optimal scenario is to buy the pound with each good decline in pair with the US dollar. The COT report indicates that long non-commercial positions decreased from the level of 57,232 to the level of 44,686, while short non-commercial positions increased from the level of 35,329 to the level of 36,717. As a result, the non-commercial net position decreased to 7,969 against 21,903. The closing price of last week rose slightly and amounted to 1.3886 against 1.3853.

Signals of indicators:

Moving averages

Trading is conducted above 30 and 50 daily averages, which indicates the continuation of the upward trend for the pair formed last week.

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

In case of a decline in the pair, the lower border of the indicator in the area of 1.3730 will act as 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 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.