GBP/USD: plan for the European session on December 11. COT reports. Pound buyers are less confident in the Brexit trade deal.

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

After a fairly large number of deals in the morning, which I analyzed in detail in my afternoon review, we did not obtain anything that was comprehensible during the US session. A signal to buy the pound from the 1.3246 level worked out, afterwards the market hovered around the 1.3290 level, which has retained its importance at the moment.

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The buyers' task is to maintain control over the 1.3290 level. Forming a false breakout there in the first half of the day will be an excellent signal to open long positions in hopes for the pound to recover in the short term. The main goal will be a breakout and getting the pair to settle above the resistance of 1.3340, testing it from top to bottom, produces an additional entry point into long positions in hopes to reach a high of 1.3388, where I recommend taking profits. The next targets are resistances at 1.3437 and 1.3489, but they will only be available if we receive good news on the Brexit deal. In case bulls are not active in the 1.3290 support area, it is best not to rush into long deals, but to wait until the 1.3246 low has been updated. Take note that this will be the third test of this area, which may once again be unable to withstand bearish pressure. Therefore, I also recommend opening long positions from there only after forming a false breakout. A larger support level is seen in the 1.3198 area, where you can buy GBP/USD immediately on a rebound, counting on a correction of 20-30 points.

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

The summary and minutes of the meeting of the Committee on Financial Policy B will be released today, and Bank of England Governor Andrew Bailey will also deliver a speech. Most likely, he will repeat the statements calling for a trade deal, since it will be much more difficult for the central bank to support the economy without it, as even more stimulating measures will be required. A negative tone and hints of negative interest rates will put pressure on the pound. Forming a false breakout in the resistance area of 1.3340, where the moving averages pass, playing on the side of sellers, will return pressure to the pair and lead to a test of support at 1.3290. Its breakout and consolidation below, and testing it from the bottom up, produces a good signal to sell the pound in hopes for it to fall to the 1.3246 low, on which the bear market will depend. Bad news on the trade deal can sharply pull down GBP/USD around 1.3198 and 1.3114 lows. If the bulls manage to beat off the 1.3340 level, then it is better not to rush with short positions. The optimal scenario for selling the pound would be failure to settle above 1.3388. I recommend opening short positions immediately on a rebound from the high of 1.3437, counting on a downward correction of 25-30 points within the day. Let me remind you that the parties agreed to continue negotiations and the next deadline is set for December 13 of this year.

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The Commitment of Traders (COT) reports for November 24 indicates significant interest in the pound, as many traders hoped that the Brexit deal would be finalized. Long non-commercial positions rose from 30,838 to 37,087. At the same time, short non-commercial positions decreased from 47,968 to 44,986. As a result, the negative non-commercial net position was -7,899 against -17,130 a week earlier. This indicates that sellers of the British pound retain control and it also shows their slight advantage in the current situation, but the market is beginning to gradually come back to risks, and reaching a trade deal will help it in this.

Indicator signals:

Moving averages

Trading is carried out below 30 and 50 moving averages, which indicates an attempt by the bears to renew the pressure on the pound.

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

A break of the lower border of the indicator around 1.3265 will increase the pressure on the pound. A breakout of the upper border of the indicator in the 1.3325 area will lead to a new wave of growth in the pair.

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) Quick EMA period 12. Slow EMA period to 26. SMA period 9
  • Bollinger Bands (Bollinger Bands). Period 20
  • Non-commercial 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.
  • Total non-commercial net position is the difference between short and long positions of non-commercial traders.
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