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

After the data on the UK labor market, the British pound collapsed against the US dollar, and at the time of writing, the bears are trying to gain a foothold below the critical support level of 1.3775. Going beyond this area could form a very large pressure on the pair in the coming weeks. As for the trading deals in the morning, let's look at the 5-minute chart and talk about what happened. It can be seen that after the breakout of 1.3820, there was a return to this level, but before its test from the bottom up, some couple of points were not enough. Therefore, those who did not have time to sell did the right thing. Who sold - got a profit of 40 points. Purchases for a rebound from the support of 1.3776 did not bring profit and it turned out to go only to zero since I did not wait for the reverse sharp movement of the pound up.

For the second half of the day, I did not review the levels, as I believe that they will continue to be relevant. The bulls need to regain control of the resistance of 1.3775, as a lot depends on this level. A return and test of this area from the top down will lead to the formation of an excellent entry point into long positions, counting on the pair's recovery to the resistance area of 1.3814. I recommend taking profits there, as I don't believe that the pound will be able to break through higher. If this happens, the next "stop" is 1.3870. If the bulls fail to take control of the resistance of 1.3775 during the US session, it is best to postpone new long positions until the low of 1.3733 is updated, or even lower - to the level of 1.3683. Everywhere you can look for long positions at once for a rebound in the expectation of an upward correction of 30-35 points within the day.

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

The bears did a great job with their morning tasks, although I would like to get more specific guidelines for entering the market. In the second half of the day, the entire focus will be shifted to the protection of the resistance of 1.3775. The formation of a false breakout there forms an additional signal to open short positions to reach new local lows in the area of 1.3733 and 1.3683, where I recommend taking the profits. If the bears lose control over the resistance of 1.3775, then it is better not to rush with sales: the optimal scenario for opening short positions will be a test of the level of 1.3814, where you can open and sell GBP/USD immediately on a rebound in the expectation of a downward correction of 20-25 points within the day. The next major resistance level is seen at 1.3870.

Let me remind you that the COT reports (Commitment of Traders) for March 15 recorded a reduction in both short and long commercial positions. Once again, the closing of long positions was quite strong, which led to a reduction in the positive delta. The main problem for risky assets, which can include the British pound, remains the growth of US bond yields, which provides serious support to the US dollar. However, in the medium term, buyers of the pound will certainly take advantage of this moment to enter the market at more attractive prices, as a good vaccination program will allow the population to more actively curtail quarantine measures.

In the future, this will lead to a major jump in the economy, which will increase inflationary pressure and force the Bank of England to seriously consider scaling back stimulus measures and raising interest rates. Expectations of such decisions will have a positive impact on the British pound, which will lead to its growth. Long non-profit positions declined from the level of 61,271 to the level of 55,190. At the same time, the short non-profit declined from the level of 27,360 to the level of 26,590, which indicates a possible further decline in the pair. As a result, the non-profit net position fell to 28,600 from 33,911 a week earlier. The weekly closing price remained almost unchanged at 1.3898 against 1.3821. The observed downward correction in the pound will attract new buyers.

Signals of indicators:

Moving averages

Trading is conducted below 30 and 50 daily averages, which preserves the downward potential of the GBP/USD pair.

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

In the case of growth, the average border of the indicator in the area of 1.3814 will act as a resistance.

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.