GBP/USD: plan for the American session on November 4 (analysis of morning deals)

Trading 04 Nov 2020 Donner votre avis

To open long positions on GBPUSD, you need to:

In my morning forecast, I paid attention to several fairly important levels of support and resistance, from which it was possible and necessary to trade today. Let's look at the 5-minute chart and talk about where to enter the market. In the first half of the day, I paid attention to the support of 1.2967 and recommended selling the pound at the breakdown of this level. However, to my regret, after the breakdown of the pair, I did not return for a test of this area from the bottom up, and I had to miss this deal. Then, after the pair fell, the bears began to actively defend the support of 1.2914, where the formation of a false breakout formed a fairly good signal to buy the pound, which was fully implemented. Closer to lunch, the bulls regained the resistance of 1.2967, gaining a foothold on it, which led to the formation of another signal to buy the pound in the continuation of the upward trend.

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At the moment, as long as the trade is conducted above the support of 1.2967, the buy signal will work. Therefore, the nearest target in this scenario will be the resistance of 1.3043. However, the pound may not stop there either. Fixing above this range, similar to the morning purchase, forms a good signal for the continuation of the upward trend of GBP/USD with a return to the maximum of 1.3136, where I recommend fixing the profits. A more active movement of the pound up will occur only after the results of the presidential election and provided that Biden wins. In the scenario of a return of GBP/USD under the support of 1.2967, it is best to wait for a repeat update of the morning low of 1.2914 and buy the pound there if a false breakout is formed. I recommend considering long positions immediately for a rebound only after returning to the support of 1.2865.

To open short positions on GBPUSD, you need:

Weak indicators in the UK services sector led to a decline in the pound in the first half of the day, however, this trend did not continue. The primary task of the bears in the second half of the day will be to return the pound to the support level of 1.2967. However, you can open short positions from it only after the breakdown and fixing under this range with a test from the bottom up. In this case, a repeated decline in GBP/USD to the daily minimum in the area of 1.2914 will be provided. It will be possible to talk about the pair's return to 1.2856 only after the news of Donald Trump's election victory. In the scenario of further recovery of the pound, I recommend considering new short positions only after the formation of a false breakout in the area of 1.3043 or immediately on the rebound from the larger maximum of 1.3136, based on a correction of 20-30 points within the day.

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Let me remind you that in the COT reports (Commitment of Traders) for October 27, there was a reduction in both short and long positions. Long non-commercial positions fell from 39,836 to 31,799. At the same time, short non-commercial positions fell from 41,836 to 38,459. As a result, the negative non-commercial net position was at -6,660 against -2000 a week earlier, which indicates that sellers of the British pound remain in control and have a minimal advantage in the current situation.

Signals of indicators:

Moving averages

Trading is conducted in the area of 30 and 50 daily averages, which indicates an active confrontation between buyers and sellers.

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 classic daily moving averages on the daily chart D1.

Bollinger Bands

If the pound rises, the upper limit of the indicator around 1.3095 will act as a resistance. Support will be provided by the lower border in the area of 1.2920.

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 the short and long positions of non-commercial traders.
The material has been provided by InstaForex Company - www.instaforex.com

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