GBP/USD: plan for the European session on June 11 (analysis of yesterday's deals). Pressure on the pound gradually returning.

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

Following yesterday's decision by the Federal Reserve on interest rates, as well as US inflation data, the bulls tried to continue their upward trend by forming a good signal to buy the pound, which, unfortunately, did not translate into a new bullish trend. If you look at the 5-minute chart and remember my forecast for yesterday afternoon, you will see how buyers were able to break through above resistance 1.2773 in the afternoon, the second test of which from top to bottom became an entry point to long positions. However, more than 30 points of upward movement did not take place. At the moment, an important task of the bulls is to protect support 1.2706, a breakthrough of which can cause them many problems. Forming a false breakout at this level will be a signal to open long positions in the pair that can lead to updating this week's high at 1.2803. An equally important task will be to consolidate above this range, which will open new highs for GBP/USD in the areas of 1.2906 and 1.2961, where I recommend taking profits. If the pressure on the pound returns, and most likely it will be so, then after breaking through the support of 1.2706, it is best to postpone long positions until the test of this week's low in the region of 1.2620, based on a correction of 20-30 points, or buy GBP/USD at a rebound from larger support around 1.2534. It is worth recalling that you need to be very careful with purchases at current highs, as the recent Commitment of Traders (COT) report for June 2 clearly showed a change in market sentiment. Over the week, short non-profit positions increased from 61,449 to 63,014, while long non-profit positions sharply dropped from 39,192 to 26,970. As a result, the nonprofit net position became even more negative and turned out to be the level of -36,044, against -22 257, which indicates a slowdown in the short-term bullish momentum and a large downward correction to likely form.

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

Sellers coped with the task yesterday and did not allow the bulls to form another wave of pound growth. Now the primary task of the bears is to gain a foothold below the support of 1.2706 as soon as possible, which forms a new signal to open short positions in the hope of continuing to pull down the pair to the area of a high of 1.2620. Another target for sellers is support at 1.2534, where I recommend taking profits at the end of this week. In case GBP/USD grows in the morning, the bears also need to defend resistance at 1.2803, where forming a false breakout will be a signal to open short positions. When breaking through resistance 1.2803, it is best to abandon short positions to test the high of 1.2906, or sell GBP/USD immediately for a rebound from a larger resistance of 1.2961 based on a downward movement of 30-40 points by the end of the day.

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Signals of indicators:

Moving averages

Trade is carried out in the region of 30 and 50 moving average, a breakthrough of which can lead to forming a bearish market.

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 upper border of the indicator in the region of 1.2803 will lead to a new wave of growth for the pound. A break of the lower border of the indicator at 1.2700 will increase pressure on 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 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.
The material has been provided by InstaForex Company - www.instaforex.com