GBP/USD: trading plan for the US session on March 17 (analysis of morning deals)

I focused on the level of 1.2169 when I made my morning forecast and suggested trading actions based on it. Let’s take a look at the 5-minute chart and see what happened. A sell signal was generated for the pound as a result of the development and formation of a false breakout at this level, which caused the pair to decline by more than 50 points. The technical situation has not changed for the second half of the day.

You require the following to open long positions on the GBP/USD:

American statistics on industrial production, consumer expectations, and attitude indices from the University of Michigan will now receive all the attention. Positive data will increase demand for the currency. If the pound continues to fall, a buy signal and a second breakthrough into the resistance area of 1.2169 will only develop if there is a false collapse in the support area of 1.2124, just below which the moving averages playing on the buyers’ side pass. The bulls shouldn’t have any problem with this level because it was already won back in the morning. I wager on a more active rise of GBP/USD to a new monthly maximum of 1.2217, where bulls will encounter more significant difficulties while fixing and testing this range from top to bottom against the backdrop of the demolition of bears’ stop orders. I also buy there only after a breakout with the possibility of a further increase at 1.2265, where I set my profit. The pressure on the pound will return if the bulls fall below their targets and miss 1.2124 in the afternoon, which will raise the possibility of another decline in the pair. In this scenario, I suggest that you wait before making any purchases and only start long positions around the next support level of 1.2079 and only in the event of a false drop. I’ll buy GBP/USD right now only if it recovers from the low of 1.2028 with the intention of a correction of 30-35 points during the day.

If you want to trade short positions on GBP/USD, you will need:

The tasks have been completed, and sellers are now aiming to break through the nearest support level of 1.2124, which will be possible if positive US economic data is released. If the figures fall short of expectations, the pound will undoubtedly make another attempt to reach a monthly high. By analogy with what I previously indicated, the best-case scenario for the sale in this instance will be the development of a false breakout in the area of 1.2169. Lower the GBP/USD exchange rate to 1.2124; this will be yet another excellent indicator to start opening short positions. The pressure on the pound will rise with a breakout and a reverse bottom-up test of this range, generating a sell signal with a decline to 1.2079. The minimum of 1.2028, where I’ll fix the profit, remains the ultimate target. The bears will keep leaving the market due to the possibility of a GBP/USD rise and the absence of activity at 1.2169 throughout the American session. In this instance, the only entry point for short positions will be a false breakout in the area of the following resistance level of 1.2217. If there is no downward movement, I will sell GBP/USD for a rapid rebound from the high of 1.2265, but only if the pair corrects down by 30-35 points during the day.

Both long and short positions rose in the COT report (Commitment of Traders) for February 21. It should be clear that these data are of no interest at the moment because, amid the CFTC cyberattack, statistics are only now starting to catch up, making the data from one month ago less useful. I’ll hold off till new reports are released and rely on more recent data. Important events this week are predicted to yield statistics on the UK labor market and the growth of average earnings, which will help the Bank of England in determining future interest rates against the backdrop of stable inflation. The increase in household income could maintain the high rate of inflation. We are also awaiting statistics on US inflation, which might ultimately increase traders’ confidence that the Fed and Jerome Powell won’t resume their course of strict policy, as was suggested last week. The prospect of the US banking industry collapsing, which emerged during the BSV bankruptcy, would undoubtedly change Fed policymakers’ assessments of how much more they need to raise the rate to “finish off” the economy. According to the most recent COT data, long non-commercial positions increased by 4,898 to 66,891 while short non-commercial positions increased by 3,277 to 45,475. As a result, the non-commercial net position’s negative value increased to -21,416 from -19,795 a week earlier. The weekly closing price fell from 1.2181 to 1.2112 this week.

Signals from indicators

Moving Averages

Trading is done on the 30 and 50-day moving averages, which show the probability of an additional pound rise.

Notably, the author considers the time and prices of moving averages on the hourly chart H1 and departs from the standard definition of the traditional daily moving averages on the daily chart D1.

Bands by Bollinger

The indicator’s upper bound in the area of 1.2169 will serve as resistance in the event of growth.

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 9Bollinger Bands (Bollinger Bands). Period 20Non-profit speculative traders, such as individual traders, hedge funds, and large institutions use the futures market for speculative purposes and to 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.