Technical Picture

Forex Analysis & Reviews: GBP/USD: trading plan for the US session on June 13 (analysis of morning deals). The pound climbed above 1.2553. In my morning forecast, I highlighted the level of 1.2553 and recommended making trading decisions based on it. Let's look at the 5-minute chart and analyze what happened there. The breakout and subsequent retest from above to below 1.2553 provided a buy signal, resulting in an upward movement of 18 pips. The technical picture has stayed the same for the second half of the day.       To open long positions on GBP/USD, the following conditions are required: As long as trading continues above 1.2553, further growth in GBP/USD can be expected. Buyers will particularly show themselves after news of a decrease in inflation in the US, leading to a surge in the pound to monthly highs of around 1.2596. Having another entry point around 1.2553 would be desirable, so protecting this level remains a priority task for the bulls. A breakout and retest from above to below 1.2596, similar to what I discussed earlier, will provide an additional signal to open long positions, strengthening the presence of bulls with a movement towards 1.2636, reinforcing the upward trend.   The ultimate target will be the area of 1.2674, where I will take profit. In the scenario of a pound decline towards 1.2553 and a lack of activity from buyers, pressure on the pair will return. The persistence of high inflation in the US will also limit the upside potential of the pair. In that case, I will postpone market entry until the support at 1.2516 is reached. I will only open long positions there on a false breakout.   I plan to buy GBP/USD on a rebound from 1.2479, targeting a 30-35 pip correction within the day. To open short positions on GBP/USD, the following conditions are required: Sellers were unable to show anything after the news that the unemployment rate in the UK dropped to a record 3.8%, which puts pressure on the Bank of England to continue raising rates. All hope now lies with strong inflation in the US, which will help defend 1.2596.   I will only open short positions after GBP/USD rises to monthly highs, forming a false breakout. This will allow a downward move towards support at 1.2553, which acted as resistance earlier in the morning. A breakout and retest from below to above this range will restore the chances of a downward correction and provide a signal to open short positions with a decline toward 1.2516. The ultimate target remains the minimum of 1.2479, where I will take profit.   In the case of further growth in GBP/USD and a lack of activity at 1.2596, which seems likely, buyers will continue to dominate. In that case, I will postpone selling until the resistance at 1.2636 is tested. A false breakout there will be an entry point for short positions. I plan to sell GBP/USD on a rebound from the May high of around 1.2674, but only with the expectation of a downward correction of 25-30 pips within the day.     The COT (Commitment of Traders) report for June 6th showed a reduction in both short and long positions. The pound has risen significantly recently. This indicates that many market participants continue to bet on an increase in interest rates by the Bank of England. Recent forecasts and expectations that the UK economy will avoid a recession this year also contribute to the demand for risk assets. We have paused the cycle of interest rate hikes by the Federal Reserve ahead, which will also support GBP/USD buyers.   The latest COT report states that short non-commercial positions decreased by 4,056 to 52,579, while long non-commercial positions fell by 5,257 to 65,063. This led to a slight decrease in the non-commercial net position to 12,454 from 13,235 the previous week. The weekly price rose to 1.2434 from 1.2398.     Indicator signals: Moving averages Trading is conducted above the 30-day and 50-day moving averages, indicating further growth in the pair. Note: The author considers the period and prices of the moving averages on the hourly chart (H1), which differ from the general definition of classical daily moving averages on the daily chart (D1).   Bollinger Bands In case of a decline, the lower boundary of the indicator, around 1.2479, will act as support. Description of Indicators: • 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 specific 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. • The net non-commercial position is the difference between non-commercial traders' short and long positions.      

The EUR/USD pair has been going through low volatility and volume. The chart above may suggest that the pair moved quite actively, but in reality, there was only a 53-pip range between the day's high and low. Thus, we have witnessed the third consecutive boring and uninteresting day. Yesterday's only notable report was the number of approved construction permits in the United States. The report turned out slightly better than expected, which helped strengthen the dollar to some extent. But what kind of reaction are we talking about?   A mere 20 pips, which is not interesting at all and does not affect the current technical picture. The pair continues to correct sluggishly downward against an empty calendar. Yesterday, one signal was even formed. During the European trading session, the pair rebounded from the level of 1.0943 and then moved down by the aforementioned 50 pips. However, the price could not reach the target level by the end of the day, and no further signals were formed. Therefore, it was advisable to manually close the sell trade anywhere closer to the evening. It was possible to earn around 30 pips from it, which is not bad considering the current volatility. COT report: On Friday, a new COT report for June 6 was released. In the last 9 months, COT reports have fully corresponded to what is happening on the market. The chart above clearly shows that the net position of big traders (the second indicator) began to grow again in September 2022.   At the same time, the euro resumed an upward movement. The net position of non-commercial traders is bullish. The euro is trading at its highs against the US dollar. I have already mentioned that a fairly high value of the "net position" indicates the end of the uptrend. The first indicator also signals such a possibility as the red and green lines are very far from each other. It often occurs before the end of the trend. The euro tried to start falling a few months ago but there was only a pullback. During the last reporting week, the number of long positions of the "Non-commercial" group of traders decreased by 5,700 and the number of short positions rose by 1,500. The number of long positions is higher than the number of short ones. This is a very large gap. The number of long positions is 59,000 higher than short ones.     The difference is more than three times. The correction has begun. Yet, it may not be a correction but the start of a new downtrend. At this time, it is clear that the pair is likely to resume a downward movement without COT reports. 1H chart of EUR/USD In the 1-hour chart, the pair is trying to start an uptrend but there are no drivers for growth. Last week, there were many events that bolstered its rise. However, in the medium term, there are still no reasons to go long. Technical indicators signal an uptrend.   It would be better not to sell the pair now. We need to wait at least for consolidation below the trend line and the target level. On June 21, trading levels are seen at 1.0581, 1.0658-1.0669, 1.0762, 1.0806, 1.0868, 1.0943, 1.1092, 1.1137, as well as the Senkou Span B line (1.0766) and the Kijun-sen line (1.0889) lines. Ichimoku indicator lines can move intraday, which should be taken into account when determining trading signals. There are also support and resistance although no signals are made near these levels.   Signals could be made when the price either breaks or bounces from these extreme levels. Do not forget to place Stop Loss at the breakeven point when the price goes by 15 pips in the right direction. In case of a false breakout, it could save you from possible losses. Several ECB and Fed officials are scheduled to deliver speeches today. However, traders are likely to ignore their statements. Federal Reserve Chairman Jerome Powell will deliver an important speech in Congress. The main focus is on that.