GBP/USD: trading plan for the US session on April 12th (analysis of morning deals). The pound followed the euro
April 12, 2024 2:23 pm
In my morning forecast, I paid attention to the level of 1.2511 and planned to make decisions on market entry based on it. Let’s look at the 5-minute chart and analyze what happened there. The decline and the formation of a false breakout there led to a signal to buy, which resulted in the pair’s rise by only 10 points, after which pressure on the pound returned. The technical picture was reconsidered for the second half of the day.
To open long positions on GBP/USD, the following is required:
Yes, the GDP data for the UK and overall economic statistics turned out to be quite good – especially in the context of high-interest rate policies. However, this was not enough for buyers to maintain control over the market. As a result, the pound followed the euro to renew its monthly lows. In the second half of the day, figures on the growth of the University of Michigan Consumer Sentiment Index and inflation expectations are expected, so the chances of a correction for pound buyers are quite low. The tough stance of FOMC representatives such as Raphael Bostic and Mary Daly will only increase pressure on GBP/USD. In the event of a bearish reaction to the reports, before entering the market, I will wait for the formation of a false breakout around the new support at 1.2482, where the pound is currently heading. Only this will give a chance for a return of demand with the prospect of correction to the new resistance area at 1.2511, formed based on the results of the first half of the day. A breakthrough and consolidation above this range after weak US statistics will strengthen the positions of bulls and pave the way to 1.2539, where moving averages are located, favoring sellers. The ultimate target will be a maximum of 1.2575, where I plan to make a profit. In the scenario of further decline of GBP/USD along the trend and lack of activity from bulls at 1.2482 in the second half of the day, the pair will continue to fall. In this case, only a false breakout around the next support at 1.2451 will confirm the correct entry point into the market. I plan to buy GBP/USD immediately on a bounce from the minimum of 1.2417 with a target of a 30-35 point upward correction within the day.
To open short positions on GBP/USD, the following is required:
Bears have all the chances for further decline of the pound, but for this, good US statistics are needed. In the case of an upward correction of the pair, I would like to make sure of the presence of large sellers around 1.2511, where a false breakout will provide a correct entry point for selling with the goal of continuing the downtrend and updating support at 1.2482. A breakthrough and bottom-up retest of this range will deal a strong blow to the positions of bulls, leading to stop-loss triggering and opening the way to 1.2451. There, I expect the involvement of large buyers. The ultimate target will be the area of 1.2417, where I will take profit. In the event of GBP/USD rising and no movement down at 1.2511 in the second half of the day, buyers will try to achieve a small upward correction at the end of the week. In this case, I will postpone sales until a false breakout at the level of 1.2539. If there is no downward movement at that level, I will sell GBP/USD immediately on a bounce from 1.2575, but only counting on a downward correction of the pair by 30-35 points within the day.
In the COT report (Commitment of Traders) for April 2nd, there was a sharp increase in long positions and a decrease in short ones. Given the decent fundamental background for the UK last week, buyers were able to take advantage of the moment and increase their long positions. However, it should be understood that the soft policy of the Bank of England has not gone anywhere, and new statements from the regulator’s representatives may negatively affect the bullish prospects of the pound against the US dollar. Add to this the need to maintain a tough stance by the Federal Reserve, and given the latest data forcing this, it is unlikely that one should count on a strong bullish market in the GBP/USD pair. The latest COT report states that long non-commercial positions increased by 7,091 to 98,352, while short non-commercial positions decreased by 1,153 to 54,938. As a result, the spread between long and short positions increased by 1,109.
Indicator signals:
Moving averages
Trading is conducted below the 30 and 50-day moving averages, indicating further decline of the pair.
Note: The author considers the period and prices of moving averages on the H1 hourly chart and differs from the general definition of classic daily moving averages on the D1 daily chart.
Bollinger Bands
In case of decline, the lower boundary of the indicator, around 1.2493, will act as support.
Indicator Descriptions:
Moving average (determines the current trend by smoothing volatility and noise). Period 50. Marked in yellow on the chart.
Moving average (determines the current trend by smoothing volatility and noise). Period 30. Marked in green on the chart.
MACD indicator (Moving Average Convergence/Divergence). Fast EMA period 12. Slow EMA period 26. SMA period 9.
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.
Long non-commercial positions represent the total long open position of non-commercial traders.
Short non-commercial positions represent the total short open positions 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 paid attention to the level of 1.2511 and planned to make decisions on market entry based on it. Let’s look at the 5-minute chart and analyze what happened there. The decline and the formation of a false breakout there led to a signal to buy, which resulted in the pair’s rise by only 10 points, after which pressure on the pound returned. The technical picture was reconsidered for the second half of the day.
To open long positions on GBP/USD, the following is required:
Yes, the GDP data for the UK and overall economic statistics turned out to be quite good – especially in the context of high-interest rate policies. However, this was not enough for buyers to maintain control over the market. As a result, the pound followed the euro to renew its monthly lows. In the second half of the day, figures on the growth of the University of Michigan Consumer Sentiment Index and inflation expectations are expected, so the chances of a correction for pound buyers are quite low. The tough stance of FOMC representatives such as Raphael Bostic and Mary Daly will only increase pressure on GBP/USD. In the event of a bearish reaction to the reports, before entering the market, I will wait for the formation of a false breakout around the new support at 1.2482, where the pound is currently heading. Only this will give a chance for a return of demand with the prospect of correction to the new resistance area at 1.2511, formed based on the results of the first half of the day. A breakthrough and consolidation above this range after weak US statistics will strengthen the positions of bulls and pave the way to 1.2539, where moving averages are located, favoring sellers. The ultimate target will be a maximum of 1.2575, where I plan to make a profit. In the scenario of further decline of GBP/USD along the trend and lack of activity from bulls at 1.2482 in the second half of the day, the pair will continue to fall. In this case, only a false breakout around the next support at 1.2451 will confirm the correct entry point into the market. I plan to buy GBP/USD immediately on a bounce from the minimum of 1.2417 with a target of a 30-35 point upward correction within the day.
To open short positions on GBP/USD, the following is required:
Bears have all the chances for further decline of the pound, but for this, good US statistics are needed. In the case of an upward correction of the pair, I would like to make sure of the presence of large sellers around 1.2511, where a false breakout will provide a correct entry point for selling with the goal of continuing the downtrend and updating support at 1.2482. A breakthrough and bottom-up retest of this range will deal a strong blow to the positions of bulls, leading to stop-loss triggering and opening the way to 1.2451. There, I expect the involvement of large buyers. The ultimate target will be the area of 1.2417, where I will take profit. In the event of GBP/USD rising and no movement down at 1.2511 in the second half of the day, buyers will try to achieve a small upward correction at the end of the week. In this case, I will postpone sales until a false breakout at the level of 1.2539. If there is no downward movement at that level, I will sell GBP/USD immediately on a bounce from 1.2575, but only counting on a downward correction of the pair by 30-35 points within the day.
In the COT report (Commitment of Traders) for April 2nd, there was a sharp increase in long positions and a decrease in short ones. Given the decent fundamental background for the UK last week, buyers were able to take advantage of the moment and increase their long positions. However, it should be understood that the soft policy of the Bank of England has not gone anywhere, and new statements from the regulator’s representatives may negatively affect the bullish prospects of the pound against the US dollar. Add to this the need to maintain a tough stance by the Federal Reserve, and given the latest data forcing this, it is unlikely that one should count on a strong bullish market in the GBP/USD pair. The latest COT report states that long non-commercial positions increased by 7,091 to 98,352, while short non-commercial positions decreased by 1,153 to 54,938. As a result, the spread between long and short positions increased by 1,109.
Indicator signals:
Moving averages
Trading is conducted below the 30 and 50-day moving averages, indicating further decline of the pair.
Note: The author considers the period and prices of moving averages on the H1 hourly chart and differs from the general definition of classic daily moving averages on the D1 daily chart.
Bollinger Bands
In case of decline, the lower boundary of the indicator, around 1.2493, will act as support.
Indicator Descriptions:
The material has been provided by InstaForex Company – www.instaforex.com
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