GBP/USD: trading plan for the American session on April 27 (analysis of morning trades)
April 27, 2023 12:23 pm
In my morning forecast, I drew attention to the level of 1.2454 and recommended making decisions on entering the market from there. Let’s look at the 5-minute chart and figure out what happened there. The decline and breakthrough at this level occurred without a false breakout, so it was impossible to get a buy signal. Similarly, there was no proper consolidation with a reverse test of 1.2454 from bottom to top, so I did not see a sell signal. The technical picture was revised for the second half of the day.
To open long positions for GBP/USD, you need the following:
If the data on the growth rate of the US economy in the first quarter of this year is satisfactory, it will be quite difficult for bulls to break above 1.2485. For this reason, I advise acting on a decline in the area of 1.2450 – a new support formed due to the first half of the day. The formation of a false breakout there, where the moving averages also pass, playing on the side of the bulls, will allow for a new entry point for long positions with the prospect of a surge in the area of 1.2485, which is the maximum of today. The breakthrough and reverse test from top to bottom of this range will form an additional signal to buy the pound with a movement to 1.2512. The farthest target will be the area of 1.2542, where I will fix the profit.
In the scenario of a decrease to 1.2450 amid excellent US GDP and the absence of activity from the bulls, it is better not to rush with purchases. In this case, I will open long positions only on a false breakout in the area of the next support at 1.2422. I plan to buy GBP/USD immediately on the rebound only from a minimum of 1.2387, with a target of 30-35 points correction within the day.
To open short positions for GBP/USD, you need the following:
Sellers showed themselves but could not catch the daily lows and the new level of 1.2450. If US GDP turns out to be quite good, which in theory will help the Federal Reserve continue to raise interest rates, a false breakout in the new resistance at 1.2485 will give a chance for a pound correction with the prospect of updating the new support at 1.2450. The breakthrough and reverse test from the bottom to the top of this range will increase the pressure on GBP/USD, forming a sell signal with a decline to 1.2422. The farthest target remains the minimum of 1.2387, where I will fix the profit.
In the case of GBP/USD growth in the second half of the day and the lack of activity at 1.2485, which is also quite likely, it is best to postpone sales until testing the next resistance at 1.2511. Only a false breakout there will provide an entry point for short positions. If there is no downward movement, I will sell GBP/USD on a rebound directly from the maximum of 1.2542, but only in the expectation of a pair correction down by 30-35 points within the day.
The COT report (Commitment of Traders) on April 11 showed an increase in long positions and a decrease in short positions. The latest data from the UK leaves traders hopeful for further interest rate increases in the UK, which maintains an interest in the pound. Given that the Federal Reserve’s aggressive policy is ending, and the Bank of England has no choice but to continue raising interest rates and fighting double-digit inflation, one can expect the demand for the pound to continue. The correction will be a good reason to enter long positions. The latest COT report states that non-commercial short positions decreased by 3,882 to 57,326, while non-commercial long positions jumped by 8,513 to 54,928. This has led to a sharp reduction in the negative value of the non-commercial net position to -2,398 compared to -14,793 a week earlier. The reduction has been taking place for the third week in a row, which also confirms the bullish nature of the market. The weekly closing price decreased to 1.2440 from 1.2519.
Indicator signals:
Moving Averages
Trading is taking place above the 30- and 50-day moving averages, indicating an attempt by bulls to take the initiative.
Note: The author considers the period and prices of moving averages on the H1 hourly chart and differ from the general definition of classic daily moving averages on the D1 daily chart.
Bollinger Bands
In the case of a decline, the lower border of the indicator will act as support in the area of 1.2450.
Indicator Descriptions
• Moving average (averaging, determines the current trend by smoothing out volatility and noise). Period 50. Marked on the chart in yellow.
• Moving average (averaging, determines the current trend by smoothing out volatility and noise). Period 30. Marked on the chart in green.
• MACD indicator (Moving Average Convergence/Divergence – convergence/divergence of moving averages) Fast EMA period 12. Slow EMA period 26. SMA period 9
• Bollinger Bands (Bollinger Bands). Period 20
• Non-commercial traders – speculators such as individual traders, hedge funds, and large institutions using the futures market for speculative purposes and meeting certain requirements.
• Non-commercial long positions represent the total long open position of non-commercial traders.
• Non-commercial short positions represent the total short open position of non-commercial traders.
• The total non-commercial net position is the difference between the short and long positions of non-commercial traders.
The material has been provided by InstaForex Company – www.instaforex.com
In my morning forecast, I drew attention to the level of 1.2454 and recommended making decisions on entering the market from there. Let’s look at the 5-minute chart and figure out what happened there. The decline and breakthrough at this level occurred without a false breakout, so it was impossible to get a buy signal. Similarly, there was no proper consolidation with a reverse test of 1.2454 from bottom to top, so I did not see a sell signal. The technical picture was revised for the second half of the day.
To open long positions for GBP/USD, you need the following:
If the data on the growth rate of the US economy in the first quarter of this year is satisfactory, it will be quite difficult for bulls to break above 1.2485. For this reason, I advise acting on a decline in the area of 1.2450 – a new support formed due to the first half of the day. The formation of a false breakout there, where the moving averages also pass, playing on the side of the bulls, will allow for a new entry point for long positions with the prospect of a surge in the area of 1.2485, which is the maximum of today. The breakthrough and reverse test from top to bottom of this range will form an additional signal to buy the pound with a movement to 1.2512. The farthest target will be the area of 1.2542, where I will fix the profit.
In the scenario of a decrease to 1.2450 amid excellent US GDP and the absence of activity from the bulls, it is better not to rush with purchases. In this case, I will open long positions only on a false breakout in the area of the next support at 1.2422. I plan to buy GBP/USD immediately on the rebound only from a minimum of 1.2387, with a target of 30-35 points correction within the day.
To open short positions for GBP/USD, you need the following:
Sellers showed themselves but could not catch the daily lows and the new level of 1.2450. If US GDP turns out to be quite good, which in theory will help the Federal Reserve continue to raise interest rates, a false breakout in the new resistance at 1.2485 will give a chance for a pound correction with the prospect of updating the new support at 1.2450. The breakthrough and reverse test from the bottom to the top of this range will increase the pressure on GBP/USD, forming a sell signal with a decline to 1.2422. The farthest target remains the minimum of 1.2387, where I will fix the profit.
In the case of GBP/USD growth in the second half of the day and the lack of activity at 1.2485, which is also quite likely, it is best to postpone sales until testing the next resistance at 1.2511. Only a false breakout there will provide an entry point for short positions. If there is no downward movement, I will sell GBP/USD on a rebound directly from the maximum of 1.2542, but only in the expectation of a pair correction down by 30-35 points within the day.
The COT report (Commitment of Traders) on April 11 showed an increase in long positions and a decrease in short positions. The latest data from the UK leaves traders hopeful for further interest rate increases in the UK, which maintains an interest in the pound. Given that the Federal Reserve’s aggressive policy is ending, and the Bank of England has no choice but to continue raising interest rates and fighting double-digit inflation, one can expect the demand for the pound to continue. The correction will be a good reason to enter long positions. The latest COT report states that non-commercial short positions decreased by 3,882 to 57,326, while non-commercial long positions jumped by 8,513 to 54,928. This has led to a sharp reduction in the negative value of the non-commercial net position to -2,398 compared to -14,793 a week earlier. The reduction has been taking place for the third week in a row, which also confirms the bullish nature of the market. The weekly closing price decreased to 1.2440 from 1.2519.
Indicator signals:
Moving Averages
Trading is taking place above the 30- and 50-day moving averages, indicating an attempt by bulls to take the initiative.
Note: The author considers the period and prices of moving averages on the H1 hourly chart and differ from the general definition of classic daily moving averages on the D1 daily chart.
Bollinger Bands
In the case of a decline, the lower border of the indicator will act as support in the area of 1.2450.
Indicator Descriptions
• Moving average (averaging, determines the current trend by smoothing out volatility and noise). Period 50. Marked on the chart in yellow.
• Moving average (averaging, determines the current trend by smoothing out volatility and noise). Period 30. Marked on the chart in green.
• MACD indicator (Moving Average Convergence/Divergence – convergence/divergence of moving averages) Fast EMA period 12. Slow EMA period 26. SMA period 9
• Bollinger Bands (Bollinger Bands). Period 20
• Non-commercial traders – speculators such as individual traders, hedge funds, and large institutions using the futures market for speculative purposes and meeting certain requirements.
• Non-commercial long positions represent the total long open position of non-commercial traders.
• Non-commercial short positions represent the total short open position of non-commercial traders.
• The total non-commercial net position is the difference between the short and long positions of non-commercial traders.
The material has been provided by InstaForex Company – www.instaforex.com
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