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

Due to the excessively high volatility of the pound, only one signal for entering the market was formed yesterday. Let's take a look at the 5 minute chart and break down the entry point. It can be seen how, after trying to fall below 1.3735, GBP/USD quickly returned to this level and a lot of bulls did not allow the pound to fall even deeper. Several false breakouts from top to bottom of 1.3735 resulted in creating an excellent entry point into long positions in hopes of an upward correction, which brought about 40 points of profit. We did not reach the target resistance of 1.3786, so no sell signals were formed from this level.

The fact that the bears fought at the same support at 1.3735 for quite a long time and "smeared" it quite strongly forced me to slightly revise the nearest support and resistance levels. For today, the strategy is as follows: form a false breakout in the support area of 1.3720 and this will result in a signal to open long positions in order to restore the pound to the resistance area of 1.3771, which was formed yesterday afternoon. Moving averages, playing on the side of the bears, also pass there. A large upward correction depends on this level, therefore, a breakthrough and consolidation above this range with a reverse test of it from top to bottom (by analogy with the long position, which I figured out a little higher) will lead to forming a good entry point into long positions for the purpose of updating the high of 1.3825. where I recommend taking profit. The bulls will likely be under pressure if the bulls are not that active at the low of 1.3720: in this scenario, it is best to postpone long positions until the test of the larger support area of 1.3670 from where you can open long positions immediately on a rebound, counting on an upward correction of 25-30 points within the day. Considering that important fundamental reports will not be released today, most likely the focus will be on the 1.3720 level.

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

Bears try to control the market, albeit at the cost of excessive volatility. In today's European session, the focus will shift to support at 1.3720 and the bears will try to surpass it. A breakthrough and consolidation below this level with a test from the bottom up can create another entry point to short positions for the purpose of pulling down GBP/USD so it can reach a new low like 1.3670, where I recommend taking profits. Below this area, there are quite big prospects for a renewal with lows like 1.3639 and 1.3605. In case GBP/USD grows in the first half of the day, then I recommend not to rush to sell: the optimal scenario will be short positions, provided a false breakout is formed in the resistance area of 1.3771, where the moving averages are also located. I recommend opening short positions immediately on a rebound from the larger resistance at 1.3825, counting on a correction of 20-25 points within the day.

The Commitment of Traders (COT) for March 30 recorded a reduction in both long and short positions, while the total non-commercial net position increased. Bulls have been active in the past week with every approach to major support levels, which has led to such a mess in the market. The latest report on the UK economy made it possible to build a new upward correction for the pound, albeit so far only in the short term. Confidence continues to grow among investors and economists that the UK economic recovery is gaining quite good momentum, which will support the British pound this summer, as disagreements grow at the Bank of England over how the economy will develop further and when to respond to all this. Those who expect to buy the pound should take a closer look at the market.

So: long non-commercial positions fell from 51,843 to 47,222. At the same time, short non-commercial positions fell from 30,024 to 22,263, which indicates a serious revision of forces in the market in the near future. As a result, the non-commercial net position rose to 29,959 from 21,819 a week earlier. The weekly closing price dropped to 1.3774 from 1.3859.

Indicator signals:

Moving averages

Trading is carried out below 30 and 50 moving averages, which indicates the bears' attempt to continue the downward trend.

Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart.

Bollinger Bands

A breakout of the upper border of the indicator in the area of 1.3765 will lead to a new wave of growth for the pound. A breakout of the lower border of the indicator in the area of 1.3720 will increase the pressure on the pair.

Description of indicators

• Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart.
• Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart.
• MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9
• Bollinger Bands (Bollinger Bands). Period 20
• Non-commercial 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 short and long positions of non-commercial traders.