To open long positions on GBP/USD:

According to the COT report, the number of both short and long nonprofit positions decreased sharply. Such a situation indicates the lack of trust in the pound among market players and the difficulties that the economy can face due to the spread of coronavirus. The COT report as of March 10 showed that the number of long nonprofit positions dropped to 56,077 from 76,063 while short nonprofit positions shrinked to 29,749 from 40,901. As a result, the nonprofit net position plunged to 26,328 from 35,162. Important fundamental statistics on the UK labor market and household income is set for release later today. Positive data is likely to support pound buyers as they need to return to the resistance level of 1.2296. If the price consolidates above this level, a small upward correction can occur and the pair can rise to the new highs of 1.2398 and 1.2514, where the upper border of the new downward channel is likely to be formed. Yesterday, the support level was 1.2197. It is better to open Long positions from this level only in case of a false breakthrough. It is preferable to open buy deals only if the price tests the lows of 1.2150 and 1.2060 as the bearish trend takes place in the market.

To open short positions on GBP/USD:

The price rose slightly after the support level was updated to 1.2197 yesterday. At the moment, the price is likely to form a false breakthrough near the resistance level of 1.2296. Meanwhile, weak labor market data in the UK can also contribute to that. As a result, the GBP/USD pair can retrace to the low of 1.2197 and break through this level. It is preferable to take profit if the price reaches the lows of 1.2150, 1.2112, and 1.2060. If the price rises above the resistance level of 1.2296 in the first half of the day, it is better to open Short positions on the rebound from the high of 1.2398.

Indicator signals:

Moving averages

Trading is below 30 and 50 moving averages, indicating that the pound is likely to continue falling.

Bollinger Bands

If the price breaks through the lower border of the indicator near 1.21973, the pound is likely to plunge. If the price breaks through the upper border of the indicator near 1.2296, the possibility of the upward correction can increase.

Description of indicators

• Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The line is marked in yellow.
• Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The line is marked in green.
• MACD indicator (Moving Average Convergence/Divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9
• Bollinger Bands. Period 20
• Non-profit traders are speculators, such as individual traders, hedge funds and large institutions that use the futures market for speculative purposes and meet certain requirements.
• Long nonprofit positions represent the total long open position of nonprofit traders.
• Short nonprofit positions represent the total short open position of nonprofit traders.
• Total non-profit net position is the difference between short and long positions of non-profit traders.