To open long positions in GBP/USD, you should:

In my previous review, I advised you to consider entering the market from 1.3964. As seen from the M5 chart, bulls intend to break through resistance at 1.3964 and extend yesterday's upward trend since the price has reversed and has tested this level from top to bottom. Despite a buy signal, the price failed to rise again. Immediately after the formation of the entry point, bears lost control of the 1.3964 level. The best thing to do was to take profit from the above level. Even if you incurred losses, you do not have to worry. You did everything right and entered the market accurately interpreting the signal. The thing is that today is the day when market makers and trading robots collect stop orders and cause fluctuations in the market ahead of an upcoming meeting of the Bank of England.

Ahead of the upcoming monetary policy meeting of the Bank of England, bulls' task for the second half of the day will be to protect the support level of 1.3942. A false breakout at this level will give a buy signal allowing the extension of the upward trend. In this case, the target is seen at 1.3996. The price will break though this range only if the BoE changes its QE programme. A breakout at 1.3996 and test of this level from top to bottom will give an additional buy signal. In such a case, a Take Profit should be set at 1.4062. If traders are less active in the area of the support level of 1.3942, you should refrain from opening long positions until the price tests the low of 1.3897. Also, there are moving averages slightly above it. You can buy GBP/USD immediately on a rebound, allowing a 30-50 pips intraday correction. The level of 1.3855 is seen as the next support.

To open short positions in GBP/USD, you should:

Bears' task for the first half of the day is to break and consolidat below the support level of 1.3942. A test of this level will give an excellent entry point. The market is likely to resume its corrective move. A Take Profit should be set at 1.3897. If the BoE decides against changing its monetary policy in the short term, GBP/USD may even plunge to 1.3855. If the pound rises in the second half of the day, bears may rely on the resistance level of 1.3996. However, they should open short positions from it only if a false breakout occurs. It will be possible to sell GBP/USD immediately on a rebound from the high of 1.4062, allowing a 30-35 pips intraday correction.

As a reminder, the COT report (Commitment of Traders) from March 9 logged a decrease in the number of short and long positions. The main problem for risky assets is the spike in US bond yields. This provides strong support to the US dollar. Buyers will certainly take advantage of this moment to enter the market at a reasonable price. Easing of restrictions in March this year will continue providing additional support for the pound as well as new stimulus measures to help the UK population in the fight against the coronavirus pandemic.

Long non-commercial positions declined to 61,271 from 65,138. At the same time, short non-commercials dropped to 27,360 from 29,056. The non-profit net position fell to 33 911 from 36 082 a week earlier. The weekly closing price tumbled to 1.3821 against 1.3928. A downward correction on GBP/USD is likely to attract new buyers.

Indicator signals:

Moving averages

Trading is carried out above MA(30) and MA(50), which indicates a bullish market.

Note: Periods and prices of moving averages are viewed by the author of the article on the H1 chart and differ from the general definition of the classic daily moving averages on the D1 chart.

Bollinger Bands

In case of a downward trend, the lower border of the indicator will provide support for the pair in the area of 1.3885. The upper border of the indicator located in the 1.4015 region is seen as resistance.

Description of indicators

• Moving average determines the current trend by smoothing volatility and noise. Period = 50. Marked in yellow on the chart.
• Moving average determines the current trend by smoothing volatility and noise. Period = 30. Marked in green on the chart.
• MACD indicator (Moving Average Convergence/Divergence) Fast EMA period = 12. Slow EMA period = 26. SMA period = 9
• Bollinger Bands. Period = 20
• Nonprofit traders are speculators 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.
• Non-commercial short positions represent the total short open position of non-commercial traders.
• The total non-commercial net position is the difference between short and long positions of non-commercial traders.