GBP/USD: plan for the American session on August 20
To open long positions on GBPUSD, you need:
In my morning forecast, I focused on buying in the support area of 1.3075 and recommended opening long positions from there if a false breakout is formed, which happened. Let’s analyze the entry point. Look at the 5-minute chart: you can see how buyers are actively protecting the support level of 1.3075, forming a false breakout on it. But even if you did not manage to enter at the first signal, the downward movement and repeated testing of this level on the volume in the middle of the European session became another proof of the presence of large buyers in the market. As a result, the pair quickly returned to the resistance area of 1.3126, adding 50 points of profit to the piggy bank. How the bulls defended the closing level at 1.3075 is also clearly visible on the hourly chart. In the second half of the day, the entire focus is shifted to the resistance of 1.3126, which will be the main focus. Do not rush to buy from it at the first consolidation, since the market is still in a downward correction, and it is possible that the data on the US labor market will play on the side of sellers of the pound. If active sales from the area of 1.3126 do not occur after the data is released, and trading continues above this range, you can count on a strong bullish rebound to the maximum area of 1.3164 and 1.3212, where I recommend fixing the profits. In the scenario of a decline in GBP/USD in the second half of the day, you can still expect to buy from the minimum of 1.3075 or open long positions immediately on a rebound from the support of 1.3044 in the calculation of a correction of 30-40 points within the day.
To open short positions on GBPUSD, you need:
The sellers tried, but nothing came of it. Now their task is to protect the resistance of 1.3126, from which there are also no active sales. Only the formation of a false breakout in this range after the release of strong fundamental statistics on the US labor market will be the first signal to open short positions. The main focus will be on the return of the pound to the opening level of the day and, at best, on updating its minimum in the area of 1.3075. The longer-term goal is the support of 1.3044, where I recommend fixing the profits. In the scenario of further growth of the pair, it is best to open short positions only on the rebound from the resistance of 1.3164, where the moving averages that play on the side of bears also pass. However, you should not expect a correction of more than 20-30 points from this level.
Signals of indicators:
Trading is conducted below the 30 and 50 daily averages, which indicates the continuation of a downward correction in the pair.
Note: The period and prices of 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.
Growth will be limited by the upper level of the indicator in the area of 1.3155, while the lower border in the area of 1.3060 will act as support.
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 short and long positions of non-commercial traders.
The material has been provided by InstaForex Company – www.instaforex.com