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

Earlier, I paid attention to the level of 1.3190 and recommended that you focus it while making a decision on entering the market. Let's take a look at the 5-minute chart and see what happened. Amid expectations of a more aggressive policy by the Bank of England, the pound sterling advanced. In the first half of the day, it tested the level of 1.3190 but failed to get out of this range on the first try. A false breakout created a strong sell signal, which led to a sharp drop in GBP/USD by 45 pips in the European session. At the time of preparing this material, bulls again approached 1.3190 with a view to breaking above it. From a technical point of view, nothing has changed.

Notably, everything depends on the Bank of England's monetary policy decision. Bulls will keep trying to regain control of the resistance level of 1.3190. Thus, its breakdown will result in stronger upside momentum as part of a correction. However, this requires hawkish statements by the British regulator on interest rates. In case of a decline in the second half of the day, it is important not to miss the level of 1.3122. Long positions from this mark can be considered only after a false breakdown and analysis of the statements made by the Bank of England. Growth in this scenario will once again push the pair to the resistance level of 1.3190, while its repeated test may lead to a breakout of this range. If the price consolidates above this area and tests it from the top down after the British regulator announces changes in its monetary policy, the pound sterling will most likely head for the highs of 1.3244 and 1.3275. The area of 1.3314 can be seen as a more distant target, but the way to it will open only in case of upbeat news on talks between Russia and Ukraine. In this area, I recommend locking in profits. If the GBP/USD pair slides in the US session and bulls fail to protect the level of 1.3122, it would be a wise decision to postpone long positions against the trend until the next support level of 1.3076, which is a more reliable one. Long positions at this mark can be considered only amid a false breakout. Alternatively, it will be possible to go long on a rebound at 1.3023 or at the low of 1.2966, counting on an intraday correction of 30-35 pips.

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

Bears managed to protect the level of 1.3190. However, they did not receive support from major players ahead of the meeting of the Bank of England. As a result, the pound sterling returned to the area of 1.3190. Today, the principal goal of bears is to protect the support level of 1.3190. A price return below this level and a reverse test from the bottom up will create a sell signal, thus dragging the British pound down to 1.3122. A breakout of this mark and its reverse test from the bottom up will form an additional sell signal. In this case, the way to the lows of 1.3076 and 1.3023 will open. At these marks, I recommend locking in profits. A more distant target will be 1.2966. However, such a sharp drop is possible only in the worst-case scenarios and downbeat economic forecasts from the Bank of England. In case of GBP/USD gains in the second half of the day and trading activity at 1.3190 is subdued following the meeting minutes, it would be a wise decision to postpone short positions until the price reaches the next major resistance level of 1.3244. Likewise, short positions at this mark can be considered only in case of a false breakout. Besides, you can sell the GBP/USD pair on a rebound at 1.3275 or at the high of 1.3314, with a view to catching an intraday correction of 20-25 pips.

Traders are recommended to read the following articles:

Forex Analysis & Reviews: EUR/USD: trading plan for the US session on March 17 (morning trades analysis). Bulls fail to reach above 1.1067

Forex Analysis & Reviews: GBP/USD: plan for the European session on March 17. COT reports. The Bank of England meeting will determine the pound's succeeding direction

Forex Analysis & Reviews: EUR/USD: trading plan for European session on March 17. COT reports. Fed's meeting comes as expected. Upward correction still going on

COT reports (Commitment of Traders) for March 8 recorded a sharp increase in both long and short positions. Some traders took advantage of panic in the market, others - attractive prices. However, the number of those who opened short positions was higher, which led to an increase in the negative delta. Notably, this week's macroeconomic calendar includes the Fed meeting. It is important for market participants to know what changes the regulator will make in its monetary policy amid the highest inflation rate over the past 40 years. A more active interest rate policy will boost demand for the US dollar. This, in turn, will lead to the weaker pound sterling. In addition, although Russia and Ukraine started negotiations, their meetings have not yielded any particular results yet. Against this background, I think that the best way to make a profit is to keep buying the US dollar as the main trend for the GBP/USD pair is still bearish. The only thing that may save the British pound from a major sell-off is high inflation in the UK, which could force the Bank of England to act more aggressively as well. The regulator's meeting is scheduled for today. Amid this news, the pound sterling may see a reversal. So, you should take it into account when selling GBP/USD at lows. The COT report for March 8 revealed a rise in long non-commercial positions to 50,982 from 47,679, while short non-commercial positions advanced to 63,508 from 48,016. This resulted in an increase in the negative value of the non-commercial net position to -12,526 from - 337. The weekly closing price fell to 1.3113 against 1.3422.

Indicator signals:

Moving averages

The quotes are trading above 30- and 50-day moving averages, which indicates the attempts of buyers to continue pushing the pound sterling up.

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

Bollinger Bands

A breakout of the lower boundary of the indicator in the area of 1.3100 will increase pressure on the british pound. A breakout of the upper boundary of the indicator in the area of 1.3200 will lead to growth in the pair.

Description of indicators

• The 50-day moving average determines the current trend by smoothing volatility and noise. It is marked in yellow on the chart.
• The 30- day moving average determines the current trend by smoothing volatility and noise. It is marked in green on the chart.
• The MACD indicator (Moving Average Convergence/Divergence - convergence/divergence of moving averages). The 12- and 26-day exponential moving averages (EMAs). The 9-day simple moving average (SMA).
• Bollinger Bands. Period 20
• Non-commercial 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 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.
• The total non-commercial net position is the difference between short and long positions of non-commercial traders.