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

Yesterday, the British pound generated several simply gorgeous signals to enter the market again. Let's sort them out with you. If you look at the 5-minute chart and remember yesterday's forecast, you will see how a false breakout at the 1.2921 level formed a good entry point for short positions, which quickly returned the pair to the support area of 1.2843, allowing more than 70 points of profit to be taken from the market. Afterwards, the next false breakout at 1.2843 formed an entry point into long positions. The pound gained at least 50 points. Nothing has changed from a technical point of view. Bulls still need the same breakout and consolidate above the 1.2921 range, which forms a good entry point to buy, its main target will be resistance at 1.2991, where I recommend taking profits. Good data on inflation in Great Britain (according to forecast we are expecting it to fall) can cause the pound to rapidly grow in the first half of the day. It is possible to speak about updating the high of 1.3103 only after the Federal Reserve's meeting and economic forecasts are released. It is also worthwhile to understand that long positions at highs, especially against the trend, are associated with high risk, therefore, in case bulls are not active after yesterday's high has been renewed and the pair returns to support at 1.2921, then I recommend abandoning long positions and wait for GBP/USD to fall to the middle of the sideways channel of 1.2843. You can open larger long positions immediately on a rebound from the week's low in the 1.2777 level, counting on a correction of 30-40 points within the day.

The Commitment of Traders (COT) reports for September 8 showed that long positions decreased, but in addition, there was an even larger drop in short positions, which indicates profit taking after a fairly large bear market that we saw recently. This is also evidence that further downside momentum may start to gradually slow down, but a lot will depend on the terms of the Brexit deal. Short non-commercial positions fell from 42,901 to 33, 860 during the reporting week. Long non-commercial positions fell just slightly, from 49,213 to 46,590. As a result, the non-commercial net position increased and reached 12,730 against 6,312 weeks earlier.

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

Bears will have to defend resistance at 1.2921 once again, but, as in yesterday's forecasts, short positions can be opened from it only when yesterday's high has been updated with a false breakout forming at 1.2921. The main goal is for the pound to return to the middle of the sideways channel at 1.2843, where I recommend taking profits. More persistent bears will stick around until the week's low of 1.2777 has been tested, where the main fight against the trend's direction will unfold. If there is positive news on the market related to the scandalous Brexit bill, the pound will continue to rise above 1.2921. In this case, I do not recommend rushing with sell positions. It is best to wait for the resistance test of 1.2991 and then form a false breakout there, counting on a correction of 30-40 points within the day. Larger sellers will only announce themselves after the high of 1.3103 has been updated.

Indicator signals:

Moving averages

Trading is carried out just above the 30 and 50 moving averages, which indicates the bulls' attempt to continue the upward correction of the pair.

Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the D1 daily chart.

Bollinger Bands

A breakout of the lower border of the indicator in the 1.2855 area will lead to a new wave of decline for the pound. A breakout of the upper border of the indicator in the 1.2921 area will cause the pair to rise.

Description of indicators

• Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart.
• Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart.
• MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9
• Bollinger Bands (Bollinger Bands). Period 20
• Non-commercial 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 short and long positions of non-commercial traders.