GBP/USD: plan for the European session on August 19 (analyzing yesterday's trades). Pound updates next year highs amid the

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

Buyers of the British pound continue to break through large resistance levels one by one, taking advantage of the general weakness of the US dollar and completely forgetting about the problems they will face this fall, when talks on a trade deal with the EU begin, and options for easing monetary credit, policies and new measures to stimulate the economy will be discussed.

If you look at the 5-minute chart, you will see how the first sales from the 1.3181 level brought about 30 points, and there was already a breakout on the second test of this area, which led to updating the next high of 1.3228, from where I also recommended opening short positions immediately on the rebound. After a breakout and settling above the resistance of 1.3181 in the afternoon, the probability of which I paid attention to in my review, there was a slight overtrade which resulted in forming another entry point to buy the pound along the trend. Now the bulls are focused on breaking the new resistance of 1.3260, settling at this level forms a signal to buy GBP/USD in the hope of updating the next monthly highs in the area of 1.3316 and 1.3375. However, today's UK inflation data could weaken the bullish momentum, so in case the pair falls in the first half of the day, it is best to wait for an update to the support of 1.3212 and open long positions from it in the hope of continuing the bullish trend. There are also moving averages. Buy GBP/USD immediately on the rebound, I recommend doing so only from the low of 1.3173, counting on a correction of 30-40 points within the day.

Let me remind you that the Commitment of Traders (COT) report for the previous week showed a reduction in short non-commercial positions from the level of 60,704 to the level of 59,874. On the contrary, long non-commercial positions increased from the level of 45,977 to the level of 48,053. As a result, the non-commercial net position again decreased its negative value to -2,821, against -14,727. This suggests that the market trend is about to change in the near future and buyers of the pound will have control in the medium term.

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

Sellers of the pound can only count on weak figures for inflation in the UK, which will slightly ease the pressure on buyers. A false breakout being formed along with a bad report will be the first signal to sell the pound in anticipation of updating the support of 1.3212. A more distant goal will be the low of 1.3173, where the lower border of the Bollinger indicator passes and where I recommend taking profits. If the actions continue to develop in a bullish scenario, and sellers do not show themselves above the resistance of 1.3260, I recommend that you postpone short positions until the high of 1.3316 has been tested, or sell GBP/USD immediately on the rebound from the larger resistance of 1.3375 based on a correction of 30-40 points within the day.

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Indicator signals:

Moving averages

Trading is carried out above 30 and 50 moving averages, which indicates a continuation of the bull market.

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

Growth will be limited in the area of the upper border of the indicator 1.3285. In case the pair falls, support will be provided by the lower border of the indicator at 1.3173.

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) Fast EMA period 12. Slow EMA period to 26. SMA period 9
  • Bollinger Bands (Bollinger Bands). Period 20
  • Non-commercial 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.
  • Short non-commercial 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.
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