02.09.202009:19 Forex Analysis & Reviews: GBP/USD: plan for the European session on September 2. Pound slightly grounded. COT reports. Bulls urgently need to return resistance at 1.3401

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

Buyers of the pound failed to continue growing in the second half of the day and everything ended in the resistance area of 1.3478, which is where I recommended opening short positions yesterday. Let's take a look at the 5-minute chart. You can see how the sellers actively rebuffed the bulls in the 1.3478 resistance area and after several unsuccessful attempts to return to the market, the pair continued the downward correction. At the moment, focus will be on the return of the 1.3401 resistance, since a lot depends on it. It will be possible to open long positions only after you have settled above this level while expecting the upward trend to resume and an update of the high of 1.3523, where I recommend taking profits. The long-term target is 1.3563. However, several rather important events are planned for today. The first of these is the UK Treasury hearing. It will present a report on the work of the Bank of England. In addition, BoE Governor Andrew Bailey will also deliver a speech, which may put pressure on the British pound. Therefore, the more optimal scenario is to buy after the GBP/USD falls to the support area of 1.3313. The first test of this area can lead to a rebound of the pair by 20-30 points within the day. A larger support is seen in the 1.3255 area, where you can also open long positions based on a correction of 30-40 points.

Let me remind you that the Commitment of Traders (COT) reports for August 25 recorded a reduction in long positions, as well as a decline in short positions. This suggests that certain players are leaving the market, those who want to lock in profits at current highs in anticipation of very strong market fluctuations in the future. The COT report indicates that there was a reduction in short non-commercial positions from the level of 47,806, to the level of 39,790 during the week. Long non-commercial positions declined more significantly from the level of 54,310 to the level of 45,390. As a result, the non-commercial net position also slightly fell, but remained in positive territory at 5,600, up from 6,504 a week earlier.

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

Bears need to try to prevent the breakout of the 1.3401 resistance, which formed at the end of Tuesday. Unsuccessfully consolidating above this range and returning to the area under it in the first half of the day will create a good entry point for selling the pound while expecting to return and fall to the support of 1.3313, where the downward movement may slow down. Settling below this range will form a more powerful bearish wave, capable of returning the pair to the 1.3255 area, where I recommend taking profits. In case sellers are not active at the 1.3401 level, it is best to postpone short positions until the month's high has been updated in the 1.3478 area, but it is also better to open short positions there after a false breakout has formed. I recommend selling GBP/USD immediately for a rebound from the new large level of 1.3523, based on a correction of 20-30 points within the day.

Indicator signals:

Moving averages

Trading is carried out just below 30 and 50 moving averages, which prevent the bulls from continuing the upward trend for the British 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 breakout of the lower border of the indicator in the 1.3340 area will lead to selling the pound in the long term. In case of growth, you can open short positions after updating the upper border of the indicator in the 1.3478 area.

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 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 the short and long positions of non-commercial traders.