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

In the first half of the day, it was not enough to wait for the formation of a false breakout in the support area of 1.3723. The fact that we fell short of this area - did not allow me to enter the market in long positions. The versatile data on the UK economy still helped the bulls to get close to the resistance of 1.3773, but so far the test of this level has not taken place. The focus will now shift to the fundamental data on US inflation, which can rock the market, allowing the bulls to continue the upward correction.

Given that from a technical point of view, nothing has changed in the first half of the day, the strategy for the US session remains the same: the bulls will focus on breaking through the resistance of 1.3773 since fixing above this level with a test of it from top to bottom will only strengthen the pound's position, which will lead to the continuation of the upward correction of the pair already in the area of the maximum of 1.3825, where I recommend taking the profit. The next larger resistance area is seen around 1.3876, however, it will only be available in the event of a bullish market reaction to the US inflation data. In the event of a decline in GBP/USD in the afternoon, all that buyers need is to protect the support of 1.3723, which they managed to do today during the European session. There are also moving averages that play on the side of the bulls. The formation of a false breakout forms an excellent signal to enter long positions in the continuation of the growth of GBP/USD to the resistance of 1.3773. In the scenario of the absence of bull activity in the support area of 1.3723, it is best not to rush to buy: the best option is to open long positions immediately on the rebound from a large local low of 1.3682 in the expectation of an upward correction of 25-30 points within the day. The next major support is seen in the area of 1.3639.

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

The initial task of the sellers of the pound is to return the support of 1.3723 to control, which they failed to do today in the first half of the day. Given that after the fundamental data, the advantage remains on the side of buyers, only a break and consolidation below this range with a test of it from the bottom up will form a good signal to open short positions in the expectation of a return to the minimum of 1.3681. If the US dollar rises after good inflation data, a break of 1.3681 will open a direct path to the minimum of 1.3639, where I recommend taking the profits. In the scenario of a further upward correction of GBP/USD, it is best not to rush to sell: you need to wait for the formation of a false breakout near the maximum of 1.3773 and only then open short positions to resume the bear market. In the scenario of a lack of activity on the part of bears in this range, the best option is to take short positions immediately on a rebound from the maximum of 1.3825, based on a downward correction of 25-30 points within the day. The next major resistance is seen in the area of 1.3876.

Let me remind you that the COT reports (Commitment of Traders) for April 6 recorded a reduction in long positions and an increase in short ones, while the total non-commercial net position decreased. Bears actively sold the pound all last week amid the tense situation with Brexit, which by the end of the week led to mass riots in Ireland. Good fundamental data that was released on the UK economy last week led only to a high spike in volatility, after which the pair continued its decline. However, investors and economists remain confident that the UK economic recovery is gaining quite a good momentum, which will support the British pound in the summer of this year. The Bank of England has long been increasingly divided over changes in monetary policy, as the economy grows, there will be additional problems with inflation, which will need to be responded to. Those who expect to buy the pound should take a closer look at the market, as now there are quite good prices, which may not be in the near future. Thus, long non-profit positions declined from the level of 47,222 to the level of 45,270. At the same time, the short non-profit rose from the level of 22,263 to 25,219, which indicates an attempt to control the market by sellers in the short term. As a result, the non-profit net position fell to the level of 19,951 from the level of 21,819 a week earlier. The weekly closing price, on the contrary, rose to 1.3913 from 1.3774.

Signals of indicators:

Moving averages

Trading is conducted above 30 and 50 daily averages, which indicates an attempt by buyers of the pound to return to the market.

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 1.3722 will increase the pressure on 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 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.