11.01.202113:58 Forex Analysis & Reviews: GBP/USD: plan for the American session on January 11 (analysis of morning deals)

To open long positions on GBPUSD, you need to:

Despite the low volatility, we managed to wait for a signal to enter the market in the first half of the day. However, this transaction did not bring much profit. Let's take a look at the 5-minute chart and analyze the entry point. I recommended taking long positions after forming a false breakout at 1.3493, which is exactly what happened. We see how the bears unsuccessfully try to break below 1.3493, after which the pair returns to this level, where a signal to buy the pound is formed. The growth from this level was about 22 points, after which the upward trend faded.

In the afternoon, I revised the levels a little and now all the attention of the bulls will be concentrated on the resistance of 1.3503. Only a break and consolidation above this range forms a signal for market entry, then you can count on a new wave of growth GBP/USD is in the area of high 1.3566, where the moving averages are playing on the side of the sellers. A break above will open a direct path to last week's high in the area of 1.3630, where I recommend taking the profit. The absence of important fundamental statistics at the beginning of this week may keep the pressure on the pair. In the scenario of a further fall in GBPUSD, it is best to take your time with purchases. The optimal scenario for opening long positions is to update the minimum of 1.3433. You can also buy the pound on a rebound from a larger low of 1.3372 with the aim of an upward correction of 30-40 points within the day.

To open short positions on GBPUSD, you need to:

As long as trading is conducted below the resistance of 1.3503, the pressure on the pound will remain. However, I recommend entering short positions only if a false breakout is formed, by analogy with the morning purchase, which I analyzed a little higher. An unsuccessful consolidation and return of GBPUSD under the level of 1.3503 will lead to a larger drop in the pound in the area of the minimum of 1.3433, where I recommend fixing the profits. The longer-term target remains the support of 1.3372, which the bears will rely on in the further decline of the pair. If the bulls manage to regain the resistance of 1.3503 closer to the US session, in this case, I recommend postponing short positions until the test of the maximum of 1.3566, from where you can sell the pound immediately for a rebound in the expectation of a downward correction of 20-30 points within the day. However, it should be understood that low market volatility can lead to the formation of false signals for entering the market, so when making decisions, consider this scenario today.

Let me remind you that COT reports (Commitment of Traders) for January 5 recorded a slight decrease in interest in the British pound, but this does not affect the overall picture. Long non-commercial positions decreased from 37,550 to 35,526. At the same time, short non-commercial positions remained practically unchanged and increased only from 31,518 to 31,861. As a result, the non-commercial net position, although it decreased, remained positive and amounted to 3,665 against 6,032 a week earlier. All this suggests that traders continue to bet on the strengthening of the pound even in the face of a new strain of COVID-19, for which there is no vaccine yet. The demand for the pound is limited by quarantine measures in the UK, which will be canceled sooner or later after the situation with infections has stabilized. Additional stimulus by the Bank of England, which will soon be discussed by economists, may also somewhat smooth the upward trend in the pound.

Signals of indicators:

Moving averages

Trading is below 30 and 50 daily averages, which indicates the likelihood of a further fall in the pound.

Note: The period and prices of moving averages are considered by the author on the hourly chart H1 and differ from the general definition of the classic daily moving averages on the daily chart D1.

Bollinger Bands

In case of a decline, the lower limit of the indicator in the area of 1.3460 will act as support. Growth will be limited by the upper level of the indicator in the area of 1.3590.

Description of indicators

• Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow.
• Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green.
• MACD indicator (Moving Average Convergence / Divergence - moving average convergence / divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9
• Bollinger Bands (Bollinger Bands). Period 20
• Non-profit 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.