GBP/USD: plan for the European session on March 10. A commitment of traders (COT) report indicate the growth of long positions

To open long positions on GBPUSD, you need:

After yesterday's sharp rise in the pound and the update of annual highs, traders began to take profits, as the real prospects for further strengthening of the GBP/USD cause a lot of questions on the background of trade negotiations between the EU and the UK, which are still in a deadlock. However, players believe in the best, as evidenced by the COT report (Commitment of Traders) for March 3, where long non-profit positions increased from the level of 72,667 to 76,063, while short non-profit positions continued to decline and amounted to 40,901 against the level of 43,069 a week earlier. As a result, the non-profit net position also rose to 35,162 from 29,598, indicating the bullish market sentiment in the medium term. Given that important fundamental data is not published today on the UK economy, the market will continue to focus on the news on trade negotiations with the EU. Buyers of the pound in the first half of the day need to protect the support of 1.3043, and only the formation of a false breakdown on it will be the first signal to open long positions in the expectation of a return and consolidation above the resistance of 1.3095. Only after that, you can expect a second wave of growth of GBP/USD in the resistance area of 1.3143 and an update of the week's maximum in the area of 1.3192, where I recommend taking the profits. In the scenario of the pound falling under the support of 1.3043, which is likely, I recommend looking at long positions only after the test of the minimum of 1.2996 or buy the pound immediately for a rebound from the support of 1.2951.

analytics5e672860828bc.jpg

To open short positions on GBPUSD, you need:

The bears face the task of breaking through and fixing below the support of 1.3043, which will increase the pressure on the pair and lead to an update of the lows of 1.2996 and 1.2951, where I recommend fixing profits since large buyers will start acting in these ranges. However, a more interesting scenario for selling GBP/USD is a false breakdown at the level of 1.3095 or short positions immediately rebound from the maximum of 1.3143, where it will be possible to build the upper border of a new ascending channel.

Signals of indicators:

Moving averages

Trading is conducted in the area of 30 and 50 moving averages, which indicates small problems for bulls with building a new upward wave.

Bollinger Bands

A break of the lower border of the indicator at 1.3043 will lead to a larger decline in the pound. Growth will be limited by the upper level at 1.3143.

analytics5e67216dce22a.jpg

Description of indicators

  • Moving average (moving average determines the current trend by smoothing volatility and noise). Period 50. It is marked in yellow on the chart.
  • Moving average (moving average determines the current trend by smoothing volatility and noise). Period 30. It is marked in green on the chart.
  • MACD indicator (Moving Average Convergence/Divergence - convergence/divergence of moving averages) 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.
  • The total non-commercial net position is the difference between the short and long positions of non-commercial traders.
The material has been provided by InstaForex Company - www.instaforex.com