24.02.202116:02 Forex Analysis & Reviews: GBP/USD: plan for the US session on February 24 (analysis of morning trades)

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

In my morning forecast, I paid attention to the resistance of 1.4186 and recommended to act based on this level. Let's look at the 5-minute chart and talk about where you could and should have sold the pound. It is clear to see how the bears form a false breakout at the level of 1.4186 and return the pair to this range. Then there is the first test of this area from the bottom up, which forms a signal to open short positions. But even if you did not have time to navigate, then after a while there was another test of this area, after which the pressure on the British pound increased significantly. As a result, the bears achieved their goal, collapsing the pound to the support of 1.4119, where I recommended taking the profits. The downward movement was more than 50 points.

And although the bulls did not cope with the task set in the morning, now a more optimal scenario is being formed for opening long positions in the continuation of the bull market. But you need to understand that only a false breakout, the opposite of the technical scenario of this morning's sale, forms a signal to open long positions on the pound. In the same range, there are also moving averages that play on the side of buyers. In this case, we can count on a new wave of growth of the pound and its return to the area of 1.4186, above which it was not possible to choose today. The breakdown and test of this level from top to bottom will lead to the formation of a new signal to open long positions to update 1.4241, where I recommend fixing the profits. A further target will be a maximum of 1.4324. In the scenario of lack of activity on the part of buyers in the area of 1.4119, I recommend postponing long positions until the test of the minimum of 1.4055, from which you can buy the pound immediately on the rebound in the expectation of an upward correction of 25-30 points within the day. The next level for buying is seen in the area of 1.3983, the test of which will mean a break in the upward trend.

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

The bears' initial task is to regain control of the support of 1.4119, which they missed today during the Asian session. However, this will not be so easy, given the bull market we have seen before. Only fixing under this level and testing it on the reverse side will form a signal to open short positions to reduce the pair to the area of 1.4055, where I recommend taking the profits. A more distant target will be the area of 1.3983. In the scenario of growth of GBP/USD in the second half of the day, it is best not to rush to sell, but to wait for the formation of a false breakout in the area of 1.4186 (I analyzed the approximate selling scenario a little higher). But I recommend opening short positions immediately for a rebound only from the maximum of 1.4241, based on a downward correction of 30-35 points within the day.

Let me remind you that the COT reports (Commitment of Traders) for February 16 recorded a reduction in long and short commercial positions. Despite this, the bulls break through to new highs each time, taking advantage of the good news on vaccination in the UK and good fundamental data indicating economic growth even during the lockdown period. The news that in March this year, the UK will resort to easing quarantine measures, will continue to fuel interest in the British pound from investors. Long non-commercial positions fell only to the level of 60,269 from the level of 60,513. At the same time, the short non-profit declined from the level of 39,395 to 38,102, which kept the market bullish. As a result, the non-profit net position rose to 22,167 from 21,118 a week earlier. The weekly closing price was 1.3914 against 1.3745. Any downward corrections with an instant buy-off of the British pound once again prove the presence of major players in the market. The constant updating of local highs and consolidation on them will continue to contribute to the bullish trend that we have been observing since the beginning of February this year.

Signals of indicators:

Moving averages

Trading is above 30 and 50 daily averages, which indicates a continuation of the bull market in the short term.

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 case of a decline in the pair, the lower limit of the indicator in the area of 1.4080 will provide support. The growth will be limited by the upper level of the indicator in the area of 1.4200.

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.