GBP/USD trading plan for European session on June 30, 2023. COT report and overview of yesterday’s trades. The pound falls
June 30, 2023 9:25 am
Yesterday, there were several entry points. Now let’s look at the 5-minute chart and try to figure out what actually happened. In my morning article, I turned your attention to 1.2651 and recommended making decisions with this level in focus. A rise and a false breakout of this mark gave a good sell signal, but the pair did not fall much. After falling by 15 pips, the pound went back to 1.2651. A breakout and downward test during the US session produced a buy signal, but then the US GDP report erased all of the bulls’ efforts, so it was impossible to get anything serious from this signal.
For long positions on GBP/USD:
Today, traders will focus on the UK GDP report, the reaction to it could be anything – especially if everything goes according to yesterday’s scenario, when the growth rate of the US economy was revised upwards. If that does not happen with the UK GDP data, the pound will likely come under pressure in the first half of the day. Figures on the current account balance and the overall change in UK investment are not very interesting.
Bulls remain focused on the support level at 1.2611, formed by yesterday’s results, eagerly awaiting a false breakout and a buy signal for GBP/USD. In such a scenario, the nearest resistance level at 1.2661 becomes the target for recovery. If the bulls are planning to count on something by the end of the month, they need to aim for this level. A breakout and establishing a foothold above 1.2661 would generate an additional buy signal, paving the way for 1.2710, which is in line with the bearish moving averages. The most distant target lies at 1.2755, where I will take profit.
If the pair declines to 1.2611 and bulls fail to protect this level, downward pressure on the pound will remain, leading to a more substantial downside move towards 1.2569. Safeguarding this area, along with a false breakout, would provide a signal for opening long positions. You could buy GBP/USD at a bounce from 1.2527, keeping in mind an intraday correction of 30-35 pips, although reaching that level seems unlikely.
For short positions on GBP/USD:
Bears achieved their objectives yesterday, and their primary goal now is not to miss 1.2661, where there could be a breakthrough in the first half of the day after the release of the UK GDP data. A false breakout of this level would trigger a sell signal, renewing downward pressure on the pair and aiming to renew the support level at 1.2611, which was formed yesterday. A breakout and subsequent upward retest would deal a more severe blow to the bulls’ positions, potentially pushing GBP/USD towards 1.2569. The most distant target remains at 1.2527, where I will take profits.
If GBP/USD rises and bears fail to defend 1.2661, and for this to happen, a strong British GDP report is not enough – at least we need a weak U.S. personal income data, in this case, it would be wise to postpone short positions until the resistance level at 1.2710 has been tested. A false breakout on this mark will produce a sell signal. If there is no downward movement there, you could sell GBP/USD at a bounce from 1.2755, keeping in mind a downward intraday correction of 30-35 pips.
COT report:
The Commitment of Traders (COT) report for June 13 showed that both long and short positions increased sharply. The pound sterling has risen significantly recently, attracting the attention of bears. However, the aggressive policy of the Bank of England and the latest inflation data in the UK are bringing new bulls into the market, who are expecting further interest rate hikes. The fact that the Federal Reserve has paused its tightening cycle while the Bank of England has no plans to do so makes GBP quite attractive. The latest COT report states that short non-commercial positions increased by 17,069 to 69,648, while long non-commercial positions jumped by 11,320 to 76,383. The non-commercial net position decreased to 6,736 from 12,454 in the previous week. The weekly price rose to 1.2605 from 1.2434.
Indicator signals:
Moving Averages
Trading is carried out below the 30 and 50 daily moving averages, which indicates the possibility of a downward correction.
Please note that the time period and levels of the moving averages are analyzed only for the H1 chart, which differs from the general definition of the classic daily moving averages on the D1 chart.
Bollinger Bands
If the pair falls, the lower band of the indicator at 1.2595 will act as support.
Description of indicators:
• A moving average of a 50-day period determines the current trend by smoothing volatility and noise; marked in yellow on the chart;
• A moving average of a 30-day period determines the current trend by smoothing volatility and noise; marked in green on the chart;
• MACD Indicator (Moving Average Convergence/Divergence) Fast EMA with a 12-day period; Slow EMA with a 26-day period. SMA with a 9-day period;
• Bollinger Bands: 20-day period;
• Non-commercial traders are speculators such as individual traders, hedge funds, and large institutions who use the futures market for speculative purposes and meet certain requirements;
• Long non-commercial positions represent the total number of long positions opened by non-commercial traders;
• Short non-commercial positions represent the total number of short positions opened by non-commercial traders;
• The non-commercial net position is the difference between short and long positions of non-commercial traders.
The material has been provided by InstaForex Company – www.instaforex.com
Yesterday, there were several entry points. Now let’s look at the 5-minute chart and try to figure out what actually happened. In my morning article, I turned your attention to 1.2651 and recommended making decisions with this level in focus. A rise and a false breakout of this mark gave a good sell signal, but the pair did not fall much. After falling by 15 pips, the pound went back to 1.2651. A breakout and downward test during the US session produced a buy signal, but then the US GDP report erased all of the bulls’ efforts, so it was impossible to get anything serious from this signal.
For long positions on GBP/USD:
Today, traders will focus on the UK GDP report, the reaction to it could be anything – especially if everything goes according to yesterday’s scenario, when the growth rate of the US economy was revised upwards. If that does not happen with the UK GDP data, the pound will likely come under pressure in the first half of the day. Figures on the current account balance and the overall change in UK investment are not very interesting.
Bulls remain focused on the support level at 1.2611, formed by yesterday’s results, eagerly awaiting a false breakout and a buy signal for GBP/USD. In such a scenario, the nearest resistance level at 1.2661 becomes the target for recovery. If the bulls are planning to count on something by the end of the month, they need to aim for this level. A breakout and establishing a foothold above 1.2661 would generate an additional buy signal, paving the way for 1.2710, which is in line with the bearish moving averages. The most distant target lies at 1.2755, where I will take profit.
If the pair declines to 1.2611 and bulls fail to protect this level, downward pressure on the pound will remain, leading to a more substantial downside move towards 1.2569. Safeguarding this area, along with a false breakout, would provide a signal for opening long positions. You could buy GBP/USD at a bounce from 1.2527, keeping in mind an intraday correction of 30-35 pips, although reaching that level seems unlikely.
For short positions on GBP/USD:
Bears achieved their objectives yesterday, and their primary goal now is not to miss 1.2661, where there could be a breakthrough in the first half of the day after the release of the UK GDP data. A false breakout of this level would trigger a sell signal, renewing downward pressure on the pair and aiming to renew the support level at 1.2611, which was formed yesterday. A breakout and subsequent upward retest would deal a more severe blow to the bulls’ positions, potentially pushing GBP/USD towards 1.2569. The most distant target remains at 1.2527, where I will take profits.
If GBP/USD rises and bears fail to defend 1.2661, and for this to happen, a strong British GDP report is not enough – at least we need a weak U.S. personal income data, in this case, it would be wise to postpone short positions until the resistance level at 1.2710 has been tested. A false breakout on this mark will produce a sell signal. If there is no downward movement there, you could sell GBP/USD at a bounce from 1.2755, keeping in mind a downward intraday correction of 30-35 pips.
COT report:
The Commitment of Traders (COT) report for June 13 showed that both long and short positions increased sharply. The pound sterling has risen significantly recently, attracting the attention of bears. However, the aggressive policy of the Bank of England and the latest inflation data in the UK are bringing new bulls into the market, who are expecting further interest rate hikes. The fact that the Federal Reserve has paused its tightening cycle while the Bank of England has no plans to do so makes GBP quite attractive. The latest COT report states that short non-commercial positions increased by 17,069 to 69,648, while long non-commercial positions jumped by 11,320 to 76,383. The non-commercial net position decreased to 6,736 from 12,454 in the previous week. The weekly price rose to 1.2605 from 1.2434.
Indicator signals:
Moving Averages
Trading is carried out below the 30 and 50 daily moving averages, which indicates the possibility of a downward correction.
Please note that the time period and levels of the moving averages are analyzed only for the H1 chart, which differs from the general definition of the classic daily moving averages on the D1 chart.
Bollinger Bands
If the pair falls, the lower band of the indicator at 1.2595 will act as support.
Description of indicators:
• A moving average of a 50-day period determines the current trend by smoothing volatility and noise; marked in yellow on the chart;
• A moving average of a 30-day period determines the current trend by smoothing volatility and noise; marked in green on the chart;
• MACD Indicator (Moving Average Convergence/Divergence) Fast EMA with a 12-day period; Slow EMA with a 26-day period. SMA with a 9-day period;
• Bollinger Bands: 20-day period;
• Non-commercial traders are speculators such as individual traders, hedge funds, and large institutions who use the futures market for speculative purposes and meet certain requirements;
• Long non-commercial positions represent the total number of long positions opened by non-commercial traders;
• Short non-commercial positions represent the total number of short positions opened by non-commercial traders;
• The non-commercial net position is the difference between short and long positions of non-commercial traders.
The material has been provided by InstaForex Company – www.instaforex.com
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