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

In the first half of the day, a good signal was formed for the sale of the British pound. However, it has not yet reached its implementation. Let's look at the 5-minute chart and talk about what happened. It is visible how the bears form a false breakout at the level of 1.3756, which forms a sell signal for the pound. However, there was no major downward movement at the time of writing this article. The calculation is now for the second half of the day since the technical picture of the pair has changed only very slightly.

Given that the volatility of the pound was quite low in the first half of the day, only a break and a test of the 1.3768 level from top to bottom will form a good entry point into long positions to continue the bullish trend and reach the maximum of 1.3805. The prospect of updating 1.3827 opens higher, as well as a further level of 1.3868, where I recommend fixing the profits. However, it is possible to count on such a large growth only in weak data on the American labor market, which will return new buyers to the market. In the case of a decline in GBP/USD in the second half of the day, the optimal scenario will be purchases from the level of 1.3731, but only if a false breakdown is formed there. If the pressure on the pound persists and the bulls do not show anything in the support area of 1.3731 – the optimal scenario will be long positions from the minimum of 1.3694, but only after forming a false breakdown. You can buy GBP/USD immediately for a rebound in the area of the minimum of 1.3645 with the aim of an upward correction of 15-20 points within the day.

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

The initial task of the bears remains to protect the resistance of 1.3768, which was slightly revised according to the results of the European session. The optimal scenario for opening short positions will also be the formation of a false breakdown, as it was with the level of 1.3756, which will weaken the position of the British pound and push the pair to the middle of the side channel 1.3731, which is visible at the end of last week. A breakout and a test of this area from the bottom up will form an additional entry point into short positions, which will push GBP/USD even lower - to 1.3694, and then just a short distance away to the minimum - 1.3645, where I recommend fixing the profits. In the absence of active sellers around 1.3768, I advise you to postpone sales until the next major resistance of 1.3805. I also recommend opening short positions from there only if a false breakdown is formed. You can sell GBP/USD immediately on a rebound from a new weekly high in the area of 1.3839, counting on a downward correction of 25-30 points within the day.

The COT reports (Commitment of Traders) for August 24 recorded a reduction in long positions and a very large increase in short ones, which significantly affected the delta. However, all these changes do not consider the Friday speech of the Chairman of the Federal Reserve System, Jerome Powell. His statements broke any hope of investors for further strengthening of the US dollar this fall. The positions of buyers of the pound have changed a lot now, and I do not recommend paying serious attention to the current COT report. Given that we have not seen any important fundamental statistics for the UK over the past week, it is obvious that buyers of the pound will seize any opportunity to build up long positions. However, the fact that representatives of the Bank of England are in no hurry to talk about changing monetary policy affects the activity of traders. I advise you to continue to adhere to buying the British pound with any good decline. The lower the pound falls, the more active buyers of risky assets will begin to show themselves, betting on real changes in the monetary policy of the Bank of England in the future. The COT report indicates that long non-commercial positions fell from the level of 41,898 to the level of 39,489.

In contrast, short non-commercial positions jumped from the level of 37,247 to the level of 56,234, which indicates a preponderance towards the sellers of the pound. However, this is not the case now. As a result, the non-commercial net position decreased to -16,746, compared to 4,651 a week earlier. The closing price of last week fell to the level of 1.3723 against 1.3840.

Signals of indicators:

Moving averages

Trading is conducted in the area of 30 and 50 daily averages, which indicates the lateral nature of the market.

Note: The author considers the period and prices of moving averages 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 lower limit of the indicator in the area of 1.3731 will increase the pressure on the pair. A break of the upper limit in the area of 1.3768 will lead to a new wave of growth of 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 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.