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

In my morning forecast, I paid attention to the level of 1.3859 and recommended making a decision based on it. Let's look at the 5-minute chart and understand the entry points. After a small downward correction of the pair in the first half of the day, the bears achieved the formation of a false breakout in the area of 1.3859, where I recommended opening long positions in the morning. However, given the low volatility of the market, there was no strong upward movement, and as a result, it was possible to be content with only 25 points of profit. From a technical point of view, the situation has not changed in any way, and the scenario for the second half of the day remained the same as for the first.

Buyers of the pound should try to prevent a breakout of the support of 1.3859 in the second half of the day, which is what sellers are trying to achieve, not allowing the pair to return to the upper border of the side channel. Only with the formation of a false breakout will be a signal to open new long positions in the expectation of continuing the upward trend in April. An equally important task for the bulls will be to break the level of 1.3921. Only fixing it with a reverse test from top to bottom will lead to the formation of another entry point into long positions in the expectation of an exit to the resistance of 1.3970, where I recommend taking the profits. The level of 1.4016 will be open to buyers on the condition that the Federal Reserve does not make any changes to its monetary policy. In the case of a decline in the pound and a lack of activity in the support area of 1.3859: I recommend postponing long positions immediately for a rebound from the new local low in the area of 1.3811, where you can count on an upward correction of 25-30 points within the day.

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

Sellers of the pound have made several unsuccessful attempts to break through the support of 1.3859. However, they are not going to give up on this. Only a test of the level of 1.3859 from the bottom up on the volume forms a good signal to open short positions in GBP/USD, with the main goal of the pair falling to the support area of 1.3811. A break in this range, which will happen if the Fed makes serious changes to its interest rate policy, will allow the bears to take the market under their control, which will push the GBP/USD to a minimum of 1.3755, where I recommend taking the profits. If the bears do not break through the support of 1.3850 on the third attempt, the pound may be able to recover to the upper border of the side channel of 1.3921. Only the formation of a false breakout will lead to the formation of a new entry point into short positions to return the pair to the lower border to the support of 1.3859. If there is no activity on the part of the bears in the area of 1.3921: the optimal scenario is to sell immediately on a rebound from the local maximum in the area of 1.3970, based on a downward correction of 25-30 points within the day.

Let me remind you that the COT reports (Commitment of Traders) for April 20 recorded an increase in both long and short positions. The total non-commercial net position almost did not change, only slightly decreasing from the previous value. The growth of positions indicates a return to the market of players who expect further growth of the pound. However, such high prices are very attractive for sellers, so there is a sharp increase in short positions. The good fundamental data that was released last week on the UK economy proves a fairly high probability of strong economic growth in the 2nd quarter of this year. It will continue to contribute to the growth of the British pound in the medium term, so I recommend betting on its further strengthening against the US dollar. It is important how the market will react to the fundamental reports on the US economy this week and the Federal Reserve's decision on interest rates – this will be the main reason for the further movement of the pound along with the trend, or for a downward correction of the pair. The COT report shows that long non-profit positions rose from 52,851 to the level of 61,053. At the same time, the short non-profit rose from the level of 27,261 to the level of 35,875, as a result of which the non-profit net position only slightly decreased to 25,178, against the level of 25,590 a week earlier. But the closing price, on the contrary, jumped to 1.3991 against 1.3753 last week, which indicates the upward potential of the pair.

Signals of indicators:

Moving averages

Trading is conducted around 30 and 50 daily averages, which indicates market uncertainty with the direction.

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

A break of the lower limit of the indicator in the area of 1.3860 will lead to a new wave of falling of the pound.

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 specific 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.