25.04.202416:22 Forex Analysis & Reviews: GBP/USD: trading plan for the US session on April 25th (analysis of morning deals). The pound continued its recovery

In my morning forecast, I focused on the level of 1.2478 and planned to make decisions based on it for market entry. Let's take a look at the 5-minute chart and see what happened there. The breakout at 1.2478 occurred, but we never reached a downward retest, so I was left without entry signals. The technical picture was slightly revised for the second half of the day.

To open long positions on GBP/USD, the following is required:

Strong US GDP data could bring pressure back to risk assets, including the British pound, as this will help the Federal Reserve maintain its tough policy, which recently has allowed the US dollar to demonstrate strength. I plan to act on the decline, as it's uncertain how the market will behave. The formation of a false breakout around the new support at 1.2471, formed at the end of the first half of the day, will provide an entry point for buying with the aim of rising to the resistance at 1.2524, above which we have not managed to break out yet. A breakout and a retest of this range from top to bottom will return the chance of a GBP/USD recovery, leading to new purchases and allowing us to reach 1.2573. If we move above this range, we can talk about a surge towards 1.2621, where I plan to take profit. Testing this level will be a clear signal of a new trend formation. In the scenario of a decline in GBP/USD and the absence of buyers at 1.2471 in the second half of the day, and for this, very good US statistics are needed to exceed economists' forecasts, sellers will regain control of the market, allowing for further significant pair decline along the trend. In this case, I will look for buys around 1.2428. The formation of a false breakout will be a suitable option for market entry. I plan to open long positions on GBP/USD immediately on a rebound from 1.2383 with a target of a 30-35 point correction within the day.

To open short positions on GBP/USD, the following is required:

Bears have every chance to continue the decline of the pair, but to do this, they need to break below 1.2471. If US data disappoints, GBP/USD will continue to rise. In this case, I will postpone sales until testing the resistance at 1.2524, formed at the end of the first half of the day. Only the formation of a false breakout there will allow us to ensure the presence of large sellers in the market, leading to a decline in GBP/USD to around 1.2471, just below where the moving averages are located. A breakout and a reverse test from the bottom to the top of this range will increase pressure on the pair, giving bears an advantage and another selling point with the goal of refreshing 1.2428. The ultimate target will be the minimum at 1.2383, where I will take profit. In the scenario of a GBP/USD rise and the absence of bears at 1.2524 in the second half of the day, bulls will have the opportunity to continue the correction upwards towards the resistance at 1.2573. I will only initiate sales there on a false breakout. In the absence of activity there as well, I suggest opening short positions on GBP/USD from 1.2621, expecting a pair rebound downwards by 30-35 points within the day.

In the COT report (Commitment of Traders) as of April 16, there was a sharp reduction in long positions and an increase in short ones. Pound buyers continue to leave the market, and there are objective reasons for this: released inflation data in the UK and the US indicated the need for further price growth control, which will certainly force central banks to continue their tough stance. Considering that the UK economy suffers much more from all this than the US economy, it's not surprising why pressure on the British pound has sharply increased. New statements from regulator representatives also negatively affected the bullish prospects for the pound. Add to all this the need to maintain a tough stance by the Federal Reserve, and it's hardly worth expecting a strong bullish market in the GBP/USD pair. The latest COT report states that long non-commercial positions decreased by 8,200 to 71,800, while short non-commercial positions increased by 11,433 to 63,181. As a result, the spread between long and short positions decreased by 1,334.

Indicator Signals:

Moving Averages

Trading is above the 30 and 50-day moving averages, indicating a bullish market character.

Note: The author considers the periods and prices of moving averages on the hourly chart H1 and differs from the general definition of classic daily moving averages on the daily chart D1.

Bollinger Bands

In case of a decline, the lower boundary of the indicator, around 1.2428, will act as support.

Description of Indicators:

• Moving average (determines the current trend by smoothing volatility and noise). Period - 50. Marked in yellow on the chart.
• Moving average (determines the current trend by smoothing volatility and noise). Period - 30. Marked in green on the chart.
• MACD indicator (Moving Average Convergence/Divergence - convergence/divergence of moving averages) Fast EMA - period 12. Slow EMA - period 26. SMA - period 9.
• Bollinger Bands (Bollinger Bands). Period - 20.
• Non-commercial traders - speculators, such as individual traders, hedge funds, and large institutions, 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 positions of non-commercial traders.
• The total non-commercial net position is the difference between the short and long positions of non-commercial traders.