GBP/USD: plan for the European session on April 8. COT reports indicate lack of willingness to trade the British pound in

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

News that the health of British Prime Minister Boris Johnson is 'stable' led to a slight strengthening of the pound in the afternoon, but it did not work out to form a larger upward trend, which could re-lock the pair in the side channel where it was for the entire period of the previous week, as evidenced by data. The COT (Commitment of Traders) report for March 31 showed that traders clearly had no desire to go and take any action with the pound in such a market. There was a reduction in both long and short positions. According to the data, during the reporting week, there was a decrease in short non-profit positions from the level of 36,650 to 32,156, while long non-profit positions also fell from the level of 46,534 to 37,149. As a result, the non-commercial net position also fell to 4,993 from 10,884. Given that important fundamental statistics on the British pound are not expected today, it is likely that volatility will continue to fall, and the pair will remain in the side channel until positive news appears. Bulls need to focus on defending support 1.2285, where the formation of a false breakout will be a signal to open long positions in the expectation of a breakout and consolidation above the resistance of 1.2383, which will lead to a larger upward trend and to last week's high in the area of 1.2484, where I recommend taking profits. If there is no serious activity around 1.2285, then it is best to look at long positions again for a rebound from the support of 1.2166 in the expectation of a correction of 50-60 points within the day.

To open short positions on GBP/USD you need:

Pound sellers need to try to regain control of the market, and for this it is necessary to gain a foothold below the support of 1.2285, which they lost yesterday in the morning. A breakthrough of this level will lead to a larger sell-off of GBP/USD in the area of lows of 1.2166 and 1.2030, where I recommend taking profits. If the bears remain in standby mode and do not show any activity at a low of 1.2285, it is best to postpone short positions until a false breakout forms in the resistance area of 1.2383, which will be the first signal to sell the pound. Otherwise, it is best to short the market from the high of 1.2484, which is a large level of the previous week, or to rebound from the new resistance 1.2605.

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Signals of indicators:

Moving averages

Trade is carried out in the range of 30 and 50 moving averages, which indicates market uncertainty with a further prospect of a pound decline.

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

Bollinger bands

A break of the lower border of the indicator at 1.2285 will cause the pound to sharply fall. A break of the upper border of the indicator in the region of 1.2383 will lead to a larger upward correction.

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 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 nonprofit positions represent the total long open position of nonprofit traders.
  • Short nonprofit positions represent the total short open position of nonprofit traders.
  • The total non-profit net position is the difference between short and long positions of non-profit traders.
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