07.05.202519:39 Forex Analysis & Reviews: GBP/USD: Trading Plan for the U.S. Session on May 7th (Review of Morning Trades)

In my morning forecast, I focused on the 1.3335 level and planned to base entry decisions around it. Let's look at the 5-minute chart and see what happened. A breakout and subsequent retest of 1.3335 led to a sell entry on the pound, but the pair failed to show a major drop. The technical picture was revised for the second half of the day.

To open long positions on GBP/USD:

The UK Construction PMI data offered no surprises, so buyers chose not to rush and instead wait for more significant U.S. statistics. In the second half of the day, attention will shift to the FOMC's decision on the benchmark interest rate, the accompanying statement, and Jerome Powell's press conference. The Fed is expected to leave rates unchanged, which could put pressure on the dollar. If the pair declines—which is possible if the Fed signals a dovish shift—I prefer to act near the new support level at 1.3325, formed during the first half of the day. A false breakout there would offer a good long entry with a target of recovery to the 1.3364 resistance level. A breakout and downward retest of that range would mark a new entry point targeting 1.3399, reinforcing the bullish market. The furthest target will be the 1.3437 level, where I plan to take profit. If GBP/USD declines and bulls fail to show activity at 1.3325 in the second half of the day, pressure on the pound will return. In that case, only a false breakout near 1.3286 will be a suitable condition for opening long positions. I will consider buying GBP/USD on a rebound from the 1.3260 support, aiming for an intraday correction of 30–35 points.

To open short positions on GBP/USD:

Sellers are not showing much presence for now. In the event of another upward push in GBP/USD after weak U.S. data—which is likely—I will act only if a false breakout forms near the 1.3364 resistance. That would provide a short entry with the goal of pushing the pound down to the 1.3325 support, where the moving averages currently lie. A breakout and upward retest of this range would trigger stop-loss orders and open the path to 1.3286. The furthest target will be the 1.3260 level, where I plan to take profit. If demand for the pound continues in the second half of the day—as seems likely—and bears do not appear around 1.3364, then it's better to postpone selling until a test of the 1.3399 resistance. I'll only open short positions there on a false breakout. If there's no downward move there either, I'll look to short on a rebound from 1.3437, but only aiming for a 30–35 point intraday correction.

Commitment of Traders (COT) Report for April 29:

The latest COT report showed a reduction in both long and short positions. Given that the Bank of England, like the U.S. Federal Reserve, is not planning further rate cuts for now, traders are likely to focus on new fundamental data that can shed light on the state of the British economy and the impact of Trump's new tariffs on it. The report indicated that long non-commercial positions fell by 2,957 to 91,064, while short non-commercial positions decreased by 6,426 to 67,105. As a result, the gap between long and short positions increased by 12,776.

Indicator Signals:

Moving Averages: Trading is occurring above the 30- and 50-period moving averages, which points to continued pound strength.

Note: The moving average periods and prices are based on the H1 chart used by the author and differ from standard daily moving averages on the D1 chart.

Bollinger Bands: In case of a decline, the lower band around 1.3330 will serve as support.

Indicator Descriptions: • Moving Average (MA): Identifies the current trend by smoothing out volatility and noise. Period 50 is shown in yellow; period 30 is shown in green. • MACD (Moving Average Convergence/Divergence): Fast EMA – period 12, Slow EMA – period 26, SMA – period 9. • Bollinger Bands: Period 20. • Non-commercial traders: Speculators such as individual traders, hedge funds, and large institutions using the futures market for speculative purposes and meeting specific criteria. • Long non-commercial positions: The total open long position held by non-commercial traders. • Short non-commercial positions: The total open short position held by non-commercial traders. • Net non-commercial position: The difference between long and short positions held by non-commercial traders.