18.02.202113:20 Forex Analysis & Reviews: GBP/USD: plan for the US session on February 18 (analysis of morning trades)

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

In my morning forecast, I paid attention to the level of 1.3843 and recommended acting on it. Let's look at the 5-minute chart and talk about where and how you could earn money. The unsuccessful attempt of the bears to continue the downward trend led to the formation of a false breakout in the support area of 1.3843. In this scenario, even in my morning forecast, I recommended opening long positions. Everything happened exactly according to the script. The target was the resistance of 1.3899, which the pound reached without a single correction, thereby proving the presence of a large buyer in the market. We will analyze the scenario for further purchases below.

The best option for building up long positions is a downward correction to the support area of 1.3899, where the formation of a false breakout forms a convenient entry point into long positions in the continuation of the bull market. It is important to understand: the growth from this level should be quite rapid with an update of the highs of today and preferably with a resistance test of 1.3949, where I recommend taking the profits. If there is no downward correction, then we will focus on the level of 1.3949, but I recommend buying from it only in the case of a breakthrough and a test of this area from top to bottom, along with bad data on the US labor market and real estate. In this case, we can expect to reach the new resistance area of 1.3993. If there is no activity on the part of the bulls in the support area of 1.3899, I recommend postponing long positions until the test of the minimum of 1.3843, from which you can open long positions immediately on the rebound to correct 25-30 points within the day. There is also the lower border of the current ascending channel.

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

The bears did not cope with the initial task, and now all their attention will be focused on the resistance of 1.3949. However, the formation of a false breakout will be a signal to open short positions on the pound. The main goal will be the return of GBP/USD to the support area of 1.3899. To say that the bears managed to repel the attack of buyers: it will be possible only after there are a breakdown and consolidation below 1.3899, and the test of this level from the bottom up forms a convenient entry point into short positions to reduce to the minimum of the day in the area of 1.3843, where I recommend fixing the profits. In the scenario of a lack of activity of sellers in the resistance area of 1.3949, it is best to postpone sales for a rebound from the high of 1.3993 in the expectation of a downward correction of 25-30 points within the day.

Let me remind you that the COT reports (Commitment of Traders) for February 9 recorded a sharp increase in long non-commercial positions and a reduction in short ones. This led to a fairly large increase in the positive delta. The bulls are making their way to new highs taking advantage of the good news on vaccination in the UK. Last week's report on UK GDP led only to a larger build-up of long positions in the expectation of a strong economic recovery in early 2021. Long non-profit positions rose from the level of 53,658 to the level of 60,513. At the same time, the short non-profit declined from the level of 44,042 to the level of 39,395, which only strengthened the bullish sentiment. As a result, the non-profit net position rose to 21,118, up from 9,616 a week earlier. The weekly closing price was 1.3745 against 1.3675. The fact that the bulls held their positions on such high volatility within the week once again suggests that the pair is set to overcome the annual highs and quickly return to the area of the 40th figure. I recommend betting on further strengthening of the pound. As the quarantine measures are lifted, which are expected to be phased out in February this year, demand for the pound will only increase. In March, we expect news about the support of the population and the UK labor market, which also pushes the pound up now.

Signals of indicators:

Moving averages

Trading is already above 30 and 50 daily averages, which indicates a market turn in the direction of buyers.

Note: The period and prices of the 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 the event of a decline in the pound, the lower limit of the indicator in the area of 1.3800 will provide support.

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.